Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe chapter is quite readable and in fact very lucid.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?My main comments are from practitioner''s point of view. There are various approaches to measuring depletion for renewable and non-renewable and the chapter has clearly described this.
For renewable resources especially how do we value the young resources? Should we give the same weight as that of mature species? Similarly in most of the developing countries the value assigned or recorded is not efficient price. Here a mention should be made that efficient prices should be used rather than market prices. Just placing a market price would underestimate the value of the asset.
The future prices of the asset under consideration in reality should be based on assumption about the future demand and sustainable supply and it should not be just based on historical projections. We are not sure if the historical values were sustainable or not.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Practically it poses lot of problems. In case of minerals for example, the market prices are not efficient prices and they are distorted. Whereas for produced assets market prices are more or less efficient (if not efficient not too inefficient). The return on produced assets would be higher. If we use a higher discount rate, the value of environmental assets now would be lower leading to bias against these resources. Many of the natural resources yield benefit far into the future and there also lot of future uncertainities. However, produced assets donot have to deal with these uncertainities as much as the non-produced assets. These inconsistencies have to be addressed.
I am afraid that the chapter does not discuss the practical issues. Definitely using the rate of return on produced assets for non-produced assets may be problematic.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?There is lot of debate over how discoveries should be treated in the national accounts. Should entire discoveries be valued using a market price or only a fraction of it be accounted for?
The NPV in case of minerals should reflect Ricardian rent. Minerals are such that the abundant ones are extracted at least cost but as an when we extract more or time progress the costs may increase. But costs may also decrease because of improved technology. Simple NPV would not account for this. If technology wings MC decreases and if technology loses MC increases. How do we account for this
Various other approaches like Elserafy method and quasi rent approach also exists and there may be some discussion on this.
Practically it is difficult to get the marginal costs. Because the company balance sheets give the costs on employees, R and D, power, etc. and donot give costs directly related with extraction of minerals. In such case how do we get an estimate of Marginal cost. The chapter should have more detailed discussion on this.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No. Including possible would not have any meaning because it is only a probability that the resource exists and it can be extracted. Assigning equal weight to all these three also does not seem right. If SEEA is proposing something like this, the weights assigned should be different. In any case every year there is reappraisal of the stock. So why to account for possible reserves. Even the second category reserve should not have same weight as that of proven reserves

Part III: Any additional comments including those of a more technical natureThere are several practical issues when it comes to actual estimation, The data that is available is not in the form required by SEEA.
Second problem arises because of market inefficiencies in developing countries.
3) The environmental damages from energy and mining sector should also be included in the national accounts.
4) More problematic issue is the estimation of stock in case of mobile resource like fisheries. How do we assign geographical boundaries?
5) The unit of biodiversity accounts is not discussed in the manual and their valuation is not discussed.

02/09/2011

UK/Office for National Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe structure is helpful. We have a team member new to the subject area working on proposals for developing our asset accounts. Experience of using the draft chapter as a guide has shown it to be a well balanced overview. We have turned to the other sources, including the issue papers, for more technical detail but think this chapter is pitched correctly.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No. 5.2.1 paras 9 and 14 refers to environmental assets ‘used in production''. Concerned this implies a narrow interpretation of ecosystem services. Would propose remove from the definition.
Helpful to talk of current and future generations as it gives an important reference to inter-generational perspective but can we assume asset will benefit both? Needs some clarity.
5.2.1 para 16 – This section needs to be extended to point towards the further development of the experimental ecosystem accounts with some aspiration to mainstream elements which can deliver to a required statistical standard. Important up front that it is clearly understood that any shortcomings in the narrower concepts addressed by the central framework as it currently stands are recognised. i.e. first step towards valuation of natural capital in its broadest sense.
Would be helpful to have ecosystems and ecosystems formally defined (using internationally accepted definition) before defining environmental assets and to then go on to say what this chapter does and does not cover. Particularly important to set context for monetary valuation in paras 33 and 34 which is only concerned with economic benefits in line with SNA. More context needs to be provided here, not sure reference in a footnote to the SNA definition is enough, Again, need to be clear on what is missed by valuing only the economic benefits accruing to the owner.
A good illustrative example would help with this, potentially building further on the forests example in para.10.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No opinion.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No. Support comments made by Australia with reference to weighting.

Part III: Any additional comments including those of a more technical natureParas 1 & 2. Replace ‘inputs'' with ‘services'' e.g. in reference to ‘services the environment provides to society''.
Para 2. Proposal for having some additional text here about the concern that focusing on the sustainability of provisioning services may give misleading signals about whether the asset as a whole is being managed sustainably.
Para 17. Final sentence re ‘land in its role in delineating geographical areas'' is confusing. Provision of space or something along those lines might be better.
Para 18. When refer to ‘bulk'' of biological and physical environment, is it possible to illustrate what may be missing ?
Para 24. See comment on para 17 above. The final sentence is a bit muddled – it is the different services (e.g. landscape) which gives the different values, not the location-defining service.
Figure 5.2.1. This table needs further work. Found it confusing. Is it saying that environmental assets where there are not economic benefits accrued to the owner are in scope of central framework but have a zero market value so will only register in physical accounts ? Again, adds confusion about those assets with a wider value to humanity which are not covered by central framework valuation.
Table 5.3.1. To be consistent with the rest of the chapter, we need to deal with soil resources and other biological resources here. Whether by separate columns or by virtue of a footnote.
Para 48 iii and 49 iv. We should seek to give some general advice that where new information indicates a revision to the assessment of stock, as this should be tracked back to previous time periods – as a revision – wherever possible.
Para 58. Some discussion is needed here on the relationship between price and quality. For abiotic materials, quality may not be relevant but for water and some biotic materials a reduction in quality, e.g. through pollution, may not affect the quantity of the stock but will affect the value.
Para 61. Replace ‘As for'' with ‘As with''.
Para 70. This is a little too focused on minerals and biomass. Other assets such as land and soils are not extracted and some land certainly is actively traded.
Para 88. As with the comment on para 58, some discussion on the price implications of changes in quality which will feed through into the monetary asset account would be welcome here.
Para 302. If an improvement in soil quality is an addition to stock, where would it be shown in Table 5.3.2? Or would it be shown as a revaluation?
Section 5.7.4. A brief discussion on carbon balances in soils (a matter for the SEEA experimental ecosystem accounts) would still be welcome here (see the discussion on carbon in timber resources, para 350).

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe structure of the Chapter is fine.
Timber is considered under inventories. Getting reliable and up-to-date data on opening stock and data of extraction both authorized and un-authorized is hard to get in developing countries. Without the above data it would be impossible to make table 5.3.2 and table 5.3.3.
Tree outside forest comes under private forest. Production is estimated on basis of growing stock of certain species only.
Fishing - mainly it is a natural asset and not cultivated in a big way. It is a very small portion under organized sector. Therefore, getting such data would be too difficult without regular surveys.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Proper methodology has to in place for getting reliable appraisal of stock of forest.
The opening stock of fish within the water bodies is too difficult to get it. Proper methodology is required to know at the initial stage.
This initial(opening) data is required for further valuation of forestry and fishery environmental assets.
1. As in the case of timber, fish, etc. wherein two categories like ‘cultivated'' and ‘natural'' have been made, under water resources, why distinction between natural ( like rivers ) and artificially created lakes (for recreational purposes, etc.), reservoirs, etc. has not been made in Table 5.2.1?
2. In respect of para 31, it is commented that biological resources if cultivated in large scale do interact with environment. Does this para mean that one has to exclude the cultivated biological resources that do not interact with environment?
3. In Table 5.6.1, does ‘land used for construction''mean the area where construction activities are going on? If so, this needs to be better clarified in Annexure A5.3.
4. Part 5.10 on biological resources has to be more elaborate. Or, is it being covered in detail under eco-system in Vol.2?
5. In para 437, it is mentioned that if the rate of flow is very high, then computing the stock can be omitted from accounts. This is not correct as in case of perennial or big rivers, the rate of flow is high and their contribution is quite significant. There may be countries where such rivers are more. Therefore, there is a need to find a way out to include them.
6. As regards para 441, it is commented that valuation has to vary with reference to quality of water.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. It can not be agreed with the proposed approaches to the measurement in respect of fishery and forestry.
Para 78 on page 19 mention that timber and fish resources are regenerated naturally and as such there is no overall physical using up of environmental asset.
1. Illegal cutting of trees on a large scale happens. These trees have grown to their present size during the course of hundred of years. Even if these cuttings are matched by planting it can not match the deforestation caused.
2. Oil spills, pollution, trawler fishing lead to decrease and extinction of various species. Small and not fully matured fish are captured by mechanized boats and trawlers and regeneration of the same is stopped.
These two points have to be taken in to the consideration in arriving at valuing depletion of forestry and fisheries assets.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Forestry
1. There are multitude of agencies and their data do not converge. Then what would be the source of the total stock of forestry for initial appraisal? For example, would it be state forestry department, FSI, environmental bodies or any other source.
2. Presently we are taking 10 % of recorded value as unrecorded value of industrial wood. Would this be reliable enough to be taken as production of industrial wood for a particular year (which will be subtracted from assets in form of depletion).
3. Source of prices for industrial wood would have to be identified.
4. Depreciation in forest assets would require a reliable method (termites and diseases also lead to depletion ).
5. How will the initial stock of non timber forest products like wild honey, lac, medicinal plants, fodder be valuated.
Fishing
1. How will the initial appraisal of fish in all water bodies be made to arrive at initial stock.
2. What price should be used for initial valuation? There are different sources, which one to use?

26/07/2011

India/University of Delhi

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe chapter is most important part as far environmental and economic accounting system is concerned. It provides a framework for a good beginning but it suffers from a number of problems both conceptual and implementation point of view, which are discussed in the specific topics.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No. The definition of the environmental assets provided is not only incomplete but also misleading. It is defining the assets based on the individual ownership though it is institutional. But most of the environmental assets are collectively owned. Due to the collective ownership most of the degradation and depletion of these assets has been taking place. Even in the present structure of asset accounting in the SNA, most of the environmental assets are accounted as far based on the individual ownership is concerned and the problem is to include the assets which are collectively owned, so the definition should be extended.
In the classification the atmospheric assets are excluded on the pretext of that these are global, but all of the atmospheric assets are not global and there destruction (depletion and degradation) not create global impacts but create local impacts. The example is local and regional pollutants. These should be included in the classification of assets.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. The section on the measurement is quite satisfactory.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No. This is a very crucial section. It says wherever available one should use market prices otherwise the approach of valuation should be based on the principle of written down replacement cost or the asset value of that resource. The asset value of resource method is applicable only when the resource is transacted in the market. The written down replacement cost method, though suffers from many theoretical and empirical problems, can be used only for some resources such as soil degradation, it is not applicable for all the resources. Therefore, here we need a combination of non-market valuation methods according to the natural resource we are talking about. Moreover the valuation of natural resources similar to man made assets is not applicable because most of the natural resources damage and degradation is irreversible.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No. This question arises because the resources are defined on the basis of individual ownership and not collective ownership. The collective ownership means all the stakeholders who are affected by the changes, either positively or negative, should be accounted in defining the assets.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes.

Part III: Any additional comments including those of a more technical natureThe chapter requires rethought and should be written again carefully, as in the present form it suffers some fundamental problems. There is no discussion about the assets which in the present market structure are not considered valuable and there market prices is negligible such as waste lands, but provides a plethora of valuable ecosystems services not only regulating but also provisioning services.

08/07/2011

Canada/Statistics Canada

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentWe felt the coverage of the various topics was well balanced, leaving little in the way of untreated topics. In comparison to the level of technical detail presented in the LG outcome papers circulated and commented over the last several months, the coverage ultimately presented in chapter 5 represents a good balance between providing an overview and sufficient detail.
The chapter was well-structured, covering the more general/global concepts and definitions in the initial sections, then progressing into more technical and asset specific applications of asset accounting in latter sections and appendices.
Certainly, the balance of the chapter – e.g. the initial sections and much of the asset specific sections – is written at a level that can be understood by non experts. We can appreciate that this must not have been easy to do. The technical appendices, as one may expect, will be more relevant to the environmental accounting practitioners.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. Some additional comments and points of clarification:
Although Table 5.2.1 is included specifically to present a classification of environmental assets pertaining to the Central Framework, it may be helpful to include a footnote to the table explaining that an overall asset classification would also include a class of environmental asset known as ecosystem assets. While the exact conceptual form of this asset class is still being debated, as you’ve noted, the notion that a larger natural capital framework would include such assets is important to convey.
Paragraph 11 notes that “some of these [ecosystem] services, particularly provisioning services, are provided directly by an individual component, but many of the services are delivered by various components working together.” It may simply be a matter of our interpretation, but if one takes this sentence literally, it seems to suggest that, for example, the timber asset component itself is responsible for the timber provisioning ecosystem service. In fact, timber provisioning is an ecosystem service that results very much from various components working together.
Paragraph 15 notes “Since it is the interaction between the various living and non-living components in a given area that leads to the delivery of ecosystem services, there is a significant amount of complexity that must be dealt with in order to undertake asset accounting by aggregating and valuing the services delivered by various ecosystems”. The paragraph that follows this goes on to say that, owing to the complexity issue, there are no “generally accepted statistical standards for the measurement of ecosystem services”. It seems that in para 15 and 16, as opposed to some of the earlier mentions of “ecosystem services” in the document, the ecosystem services term refers to actual services rather than ecosystem goods. It may be helpful to make this a bit more obvious to readers, perhaps by referring to it as ecosystem services other than provisioning services in these two paragraphs.
As a general point, we would add that it is fundamental that the distinction between ecosystem goods and services be made clear to users of this handbook, especially in light of the fact that volume II will deal mainly with services, which are not part of this central framework.
An additional suggestion in respect to the definition of environmental assets: In paragraph 14, “Environmental assets are those . . . that are used in production…”. A rewording may be considered whereby the word “are” is replaced with “can be” used in production, as these assets indicate the remaining amount, not the amount that is currently being used in production.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. As noted in paragraph 78. , “For biological resources, primarily timber resources and fish resources, this relationship between depletion and extraction/harvest does not hold. The ability for the resources to regenerate naturally means that under certain management and extraction situations, the quantity of resources extracted may be matched by a quantity of resources that are regenerated and hence there is no overall physical using up of the environmental asset”
The above holds true only under sustainable management programs. However, the growing stock of timber resources can decline if natural and anthropogenic depletion rates exceed the capacity of the renewable resource to regenerate.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. Our preference is that the discount rate used should reflect a social rate of time preference given that natural resources are public assets and their control by governments reflects social and not just private interests. As an intermediate position between a market rate and a social rate, the revised SEEA could include a discussion of the use of geometrically declining discount rates, as suggested by Harvard Economist Martin Weitzman. See < Weitzman, M. L. (1998), “Why the Far-Distant Future Should Be Discounted at Its Lowest Possible Rate.” Journal of Environmental Economics and Management 36 (3): 201-208.>

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes. [Detailed comments attached] Chatper5-Canada1.pdf;

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No. The measurement scope for mineral and energy resources can certainly include all known deposits; it can be useful for countries to produce a broader estimate of resource stocks in physical terms (and possibly monetary terms if data sources permit. In Canada, such an estimate of the “total resource base” has been undertaken on an occasional basis in physical terms only.
With regards to resources that are appropriate for inclusion in estimates of national wealth (i.e. national balance sheet), the monetary asset accounts ought to be limited to proven or proven and probable resources.
There are some practical reasons for this. For example, the inclusion of possible resources in monetary estimates of sub-soil assets would result in much-increased volatility of these estimates over time, since this category of resources is subject to great uncertainty compared to the proven and probable categories; as such, the wealth estimate would be highly volatile.
The SNA requires that "in order to comply with the general definition of an economic asset, natural assets must not only be owned but be capable of bringing economic benefits to their owners, given [existing]...economic infrastructure.” This is the primary reason why for its estimates of the value of crude bitumen Statistics Canada uses the estimate of “remaining established reserves under active development”. To adopt the much larger estimate of “remaining established reserves” would mean including in our asset valuation an enormous quantity of resources for which the economic infrastructure required for exploitation does not yet exist.
Of course, it is possible to argue that there is a high likelihood that the infrastructure to exploit at least some of these reserves will soon be put in place. Indeed, oil companies are already working on such infrastructure. One could, then, reasonably argue that at least some of these reserves should also be considered as natural assets and valued on the national balance sheet. The difficult question is, “How much should be valued?” Should it be the reserves likely to be exploited in the next five years? The next 10 years? The next 20? We would also have to ask: how much of the reserves might actually be exploited during these time frames? There is no expert consensus on what the answers to these questions are and most environmental accounting practitioners are not in any position to answer them. Creating a weighted aggregate monetary value across all categories resources, as suggested in para 193, would require accurate answers to these questions. Thus, we feel it is important to stick to what we know with near certainty – how many reserves are under active development - and we believe that to do so is consistent with the SNA2008.
As noted in paragraph 187, to insure that meaningful subsequent comparisons between monetary and physical accounts can be made, opening and closing stocks in the physical accounts should be classified by category of resource (i.e. proven, probable and possible).

Part III: Any additional comments including those of a more technical natureSome additional section-specific comments attached Chapter5_Canada2.pdf;

07/07/2011

United Nations Statistics Division (UNSD)

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentWe agree with the structure of the chapter. We believe that the chapter and in particular some sections would benefit from a more detailed explanation (see comments on specific topics where we make specific suggestions).
Tables: The presentation could be improved. The classification of assets and all the flows used in the asset accounts should have a code.
The section on soil needs some attention. We would suggest at this stage to contact FAO to add to the contents.
We would suggest including a section on how to calculate asset accounts in constant prices.
Produced assets related to environmental assets (e.g. hydraulic infrastructure, etc.) as well as permits to access resources are discussed in Chapter 4. Nevertheless, it would be useful to reference them in Chapter 5. Also reference should be made to financial assets and liabilities used to finance the financing gap as included in the environmental protection expenditure accounts.
The text should be more formal and move away from a casual compilation guide style. For instance, each of the resource account could start with a more detailed description of its information needs. A good description is made for fish resources.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. We agree with the concept of environmental asset presented in Section 5.2. We also agree with defining environmental assets in the broad sense and then narrow the scope to what is measurable in the central framework.
However, see attachment for detailed comments. Chapter5-UNSD1.pdf;

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. We agree with defining depletion of biological resources in relation to the capacity of the stock of regenerating. We also agree that the physical and monetary depletion are aligned.
For soil resources (para 74) we do not consider soil to be renewable as regeneration occurs over long periods of time.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. Since the resource rent is calculated as a residual, it should be mentioned in the text that the resource rent is not exclusively the return to non-produced environmental assets but also includes other non-produced assets (e.g. goodwill, etc.). Moreover, the suggestion to use 3-5 percent of return on the produced assets may be too simplistic and too prescriptive for a standard.
When explaining the calculation of the resource rent (para 113) it may be useful to add a note that all transactions should be measured at basic prices.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes. We think that the solution proposed is a neat way to allocate depletion between the extractor and the government.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes. In principle yes for all resources. However in practice the contribution of possible resources to the value of the stock is likely to be minimal because extraction is not likely to occur, so the weight will be very small – if at all. We should maintain the valuation separate for proven and probable to ensure consistency with the SNA balance sheets.

Part III: Any additional comments including those of a more technical natureSee attached Chapter5-UNSD2.pdf;

06/07/2011

Republic of Armenia/National Statistical Service

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentNo comments.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes.

Part III: Any additional comments including those of a more technical natureNo comments.

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentTo prevent misconceptions and the suspicion of a bias by scientists and others concerning the narrow selection of subjects for the asset accounts and for monetary evaluation for volume I we recommend to clearly point out the background of the statistical standard as a main reason for limitation. A definition and explanation of the statistical standard should be given which is used as an essential criterion for the contents in the SEEA volume I. It should be stressed explicitly that at the moment only those parts of natural capital go into volume I for which official statistics has sufficient and generally accepted methods. Therefore chapter 5 just now compiles only parts of the whole spectrum of subjects which fulfil the statistical requirements. Subjects which are content of the more experimental volume II (which are all environmental assets that have no legal owner and whose benefits accrue not only to the owner but also to the public such as :
Recreation benefits of landscape,
benefits of future use of genetic resources of wild species,
benefits of fish stocks,
loss of soils / changes of soil structure with negative effects that will occur in the future / after some generations,
reduction of future climate change damages by keeping carbon stocks in the soils,
etc.
are not less important but will become only part of volume I when fulfilling the necessary methodical standards. Until then the area can be subject of scientific research.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No. The definition of “monetary value” in paragraph 33 (Valuation) seemingly reduces the applicability of monetary valuation to those environmental assets that are owned by somebody (including the state) and to those benefits that accrue to the owner.
To prevent misconceptions and the suspicion of a bias that very important environmental assets are excluded from any kind of monetary evaluation and thus the future development of forms of national monetary asset accounting that are compatible with the aim of sustainability are impeded, the definition could be changed as follows:
“The overall monetary value of an environmental asset is equal to the monetary value of all benefits or series of benefits that accrue to people over a period of time. The core framework of the SEEA with ‘volume I’ up to now contains only the asset-value of benefits that can be calculated consistent with the requirements of statistical standards. The value of benefits in ‘volume I’ by now is equal to the economic benefits or series of economic benefits that accrue to the owner of the asset by holding or using the asset over a period of time. Other benefits which accrue as public goods do not have a market value. The asset value of such benefits will be calculated in “experimental accounts” (‘Volume II’ of the SEEA) until the quality requirements of official statistics for reporting and evaluation for them can be fulfilled and they can be incorporated in the core accounts.”

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?No opinion.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No. More detailed recommendations are necessary for those cases where market prices are missing:
What kind of assets should be calculated on the basis of:
- damage cost approach
- mitigation cost approach
- revealed preferences (such as hedonic pricing)
- stated preferences
- …

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No opinion.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No opinion.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion.

Part III: Any additional comments including those of a more technical nature Chapter5-Germany.pdf;

05/07/2011

Eurostat

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentOverall we think the chapter is well written. However, we do have serious reservations on some of the key and crucial specific topics below.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No. Generally we agree. However, we have a number of comments to make:
(A) The definition itself (paragraph 14) can be read to put too much emphasis on the current use in production (…"that are used in production"…). Better to say ''may be used''. Moreover one piece of a non-renewable asset can be used in the current period or the future but not both. The relationship to eco-system services in the definition and para 10 is not subsequently used in the text of the Chapter. We would recommend separating clearly the "dead" sub-soil assets (such as coal oil or mineral deposits) from the living, dynamic, concept of eco-systems implied elsewhere.
(B) Paragraph 20 excludes the oceans and the atmosphere using two arguments: there are no owners and (it seems) there is a lack of usefulness of information if such accounts could and would be made. The second argument is disputable at least for the physical accounts (climate change, ozone layer etc.) and should be removed or clarified. Paragraph 40 then states that the atmosphere and the oceans are excluded because they provide no benefits to their owner. The text should be clearer - there is a difference between something that provides benefits but has no owner and something that provides no benefits but has an owner.
(C) The chapter is too vague in several places on the relation between environmental and economic assets. This starts in paragraph 1 where the impression is given that environmental assets and economic assets are different things. Paragraph 8 then states that the distinction is not exclusive and that some environmental assets are also economic assets. Paragraph 36 then states that many environmental assets are economic assets. Figure 5.2.1 finally attempts to address the issue in a systematic manner. The figure seems to show that all categories of assets can be both economic and environmental assets. However, the Figure is not explained: which are the assets that have an economic value and which have no economic value, can we clarify what is the meaning of the overlapping grey bars in the header of the table?
NB in paragraph 36 the term "an entity" should be replaced by "it" or by "the asset".
(D) It remains unclear in the text what value should be attached to environmental assets that are not economic assets.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?No. Generally we agree. However, we have a number of comments to make:
The definition of depletion for renewable resources needs to be made clearer. Paragraphs 80 and following in section 5.4.2 first discuss biological models and the need to understand the reproductive capacity of the renewable resource. Paragraph 82 discusses sustainable yield in general and maximum sustainable yield in particular. Paragraph 82 then states that harvest in excess of the maximum sustainable yield represents depletion in physical terms.
However, maximum sustainable yield is defined as the maximum possible yield that can be taken off a resource in perpetuity and it refers to an optimal stock level with maximum growth and thus a specific composition of the resource in terms of age structure etc. For any stock which is actually below this point, extracting the maximum sustainable yield means to drive the stock to extinction. So the definition given for depletion in physical terms given in paragraph 82 does not seem to be correct.
In monetary terms, the closest the text comes to a definition of depletion for renewable resources is paragraph 168 which simply states that ''where the (NB: physical?) amount extracted impacts on the long term viability of the resource then depletion should be estimated'' and then refers back to section 5.4.2 and to Annex 5.1. So ultimately the only definition is within the NPV formulae in Annex 5.1.
Paragraph 60 states that "(depletion in) monetary terms represents the decline in future income that can be earned from a resource due to extraction". It would thus seem logical to explain in paragraph 168 or earlier that depletion for renewable resources represents the present value of the decline in future incomes due to continued extraction at a level that exceeds sustainable yields.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. Generally we agree. However, we have a number of comments to make:
(A) The discussion of different concepts of rent in paragraphs 109 and 110 uses several terms (differential rent etc.) that are not further used and risk confusing the reader. Suggest deleting this part and move paragraph 111 to paragraph 119.
(B) Treatment of risk and the rate of return to produced assets: The reference to government bond rates in paragraph 136 and the associated footnote should be made clearer. The text seems to argue that a risk-free rate of return should be used in any case as this is conceptually superior. This contradicts paragraph 135 which states that where possible industry-specific rates which incorporate risk should be used..
(C) The detailed critique plus counterarguments provided in paragraphs 151 to 157 on weaknesses of the NPV is perhaps too long and repeats earlier text. It is not made clear for what purpose this level of detail is provided to the compiler.
(D) A "standard" NPV method is recommended as the best method, and variants of the method are in places described as being not reliable enough. This is not a balanced description. An example is paragraphs 338 to 340 where the stumpage and consumption methods (which are special forms of NPVs) are characterised on the one hand as being able to operate when data on the age structure are missing so that the standard NPV method cannot be used. On the other hand these methods are described as not providing robust valuation in cases where the age structure changes due to either active afforestation or overexploitation. This latter statement is at best misleading. Many European forests are overmature. This is unrelated to ''active afforestation'' but poses problems for the "standard" NPV method as reality does not respect the optimal cutting age implicit in an NPV calculation. As the detailed limitations of neither method are discussed in the SEEA, statements such as ''will not provide reliable results'' should be avoided.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes. Generally we agree. However, we have a number of comments to make:
(A) Paragraphs around 174 et seq recommend including all known deposits (proven+ probable+possible) Then much later para 192 admits SNA 2008 only includes proven.
(B) Regarding valuation we agree with the idea but disagree with the text of paragraphs 192 and 193. The text implies that each class is valued separately – referring to valuation with NPV methods. The text demands that these NPV calculations should reflect different assumptions regarding the time and cost of extraction etc. but (apparently) not the likelihood of extraction. Paragraph 193 states that this likelihood should only be included in case an aggregation of the values of the different classes is wanted, i.e. after the NPVs for each class have been calculated. This would mean that the values of the different classes are not all economic values and are not comparable.
Instead the likelihood of extraction should be incorporated in the NPV calculation such that the resulting values for each class are comparable values and can be added up.
(C) Classes of known deposits are called ''classes'' in Table 5.5.2 but are called ''Categories'' in paragraphs 187 and 189, and then ''classes'' again in paragraphs 192 and 193. Please align terminology.
(D) Also on terminology, we continue to prefer "oil and gas reserves" instead of "petroleum" throughout e.g. in para 175,table 5.5.2 etc.

Part III: Any additional comments including those of a more technical nature Chapter5-Eurostat.pdf;

05/07/2011

Israel/Central Bureau of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe conceptual parts of the chapter are very clear and give an excellent background for the work. The chapter also gives a number of instructions on methods of measurements, but explains the difficulties of measurement. The overall impression is a bit discouraging, since the measurement difficulties often seem so large that it does not be possible to have internationally comparable data on many environmental assets.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. Agree with the definitions and classifications. The text is very clear and the explanation about environmental assets sometimes belonging to assets with an economic benefit is also clear. But the colors in table 5.2.1 are confusing – one could give different colors to “economic benefits” and to “no economic benefits”.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. The proposed approaches to measurement of depletion are quite complicated, and will perhaps not be easy to apply. The need for revisions following new information is mentioned, but will it be possible to make such revisions in practice - should they be made on a continuous basis and will they be made backwards in time?

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. Yes, the approach is consistent with measurement of other assets, although it may be difficult to have the necessary information.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No. Seems to be a problematic solution. In theory, one should be able to derive the accounts from the accounts of the units (if they were accounting for depletion)– the extractor would not know the value of the depletion, only the owner would be able to estimate the value. In other cases, where one unit pays for the use of an asset of another unit, the accounting for the decrease in the value of the asset is within the owner’s account. One could have an imputation of a subsidy to the extractor.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes.

Part III: Any additional comments including those of a more technical nature“183. At the same time, many countries that have mineral and energy resources have developed relevant classifications suited to their own resource endowments and countries are encouraged to use these classifications for statistical purposes. This will help ensure an alignment between statistical outputs and the physical and geological data available”. But will not help ensuring international comparability – something should be said about the need to harmonize in the future, even if there is no current international classification of mineral resources.
Small typo’s
“182. There a number of different types”

01/07/2011

Finland/Statistics Finland

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe style, tone and readability of the text are very good. The coverage of the chapter is sufficient, and the balance of material is practical to the statistical standard -part of the SEEA.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. The main problems related to measurement of depletion are well described.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. This chapter is a good introduction to valuation of specific assets in the later chapters.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No opinion.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion.

Part III: Any additional comments including those of a more technical nature40. Figure 5.2.1. does not really show overlaps or relationships between economic and environmental aspects, but only a list of those assets.
240. It is clearly noted in this paragraph, that category ‘Forests and other wooded land’ includes areas other than those used exclusively for logging purposes and hence may include areas such as national parks that have been set aside for conservation purposes.
However, ‘Conservation purposes’ in forests mean very different land use type than forestry (forestry in ISIC sense). These are often exclusive types of land use. In land use classification these uses should be clearly separated. Otherwise it is the land cover dimension that dominates the land use classification in this ‘Forest and other wooded land’ category. In the proposed land use classification in the Annex A5.3 ‘Agricultural’ and ‘Aquacultural’ are really land use categories, but ‘Forests and other wooded land’ is merely a land cover category.
311. It would be more clear, if the word order in the second sentence were ‘Thus, timber resources from primary forests are considered natural, and timber from other naturally regenerated forests and planted forests are considered cultivated.’
319-321. It is stated in 320, that ‘the definition of stock of timber resources includes timber that have been felled and is on the ground but not yet removed.’ On the other hand, the 319 uses term ‘standing timber’, which probably excludes felled timber on the ground. This is also the case for the term ‘growing stock’ in 321. According to FAO FRA definition ‘Growing stock’ includes only living trees.
(Theoretically, these differences have also a small impact on value of timber. If felled timber lie on the ground a certain time period (depending on climate etc. from less than one month to one year) before removing it from the forest, their value as raw material for industrial and other uses will decrease and finally vanish.)
Relationships between ‘stock of timber resources’, ‘standing timber’ and ‘growing stock’ should be clarified.
325. Estimates of felling residues are also an important item for carbon balance of timber and trees (these residues are a flow from actively carbon binding living tree biomass to slowly decaying and carbon releasing dead tree biomass)

01/07/2011

United Nations Food & Agriculture Organisation (FAO)

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Clear separation between central framework and experimental ecosystem accounts
FAO comment: We have a difficulty to clearly separate the components to be included in the central framework and those to be considered in the context of SEEA experimental ecosystem accounts, especially for biological resources.
§10 define four types of ecosystem services; provisioning services, regulatory services, cultural services, and supporting services. §16 points out the absence of accepted statistical standards to measure ecosystem services and in §17 the components in the central framework are introduced as the assets delivering the ecosystem services. In reality, the detailed description of individual components indicates heavy focus on provisioning services and the remaining three services are either extremely weak, neglected in later sections, or being left more or less for further development in the SEEA experimental ecosystem accounts.
On the other hand, physical account and economic account of environmental assets should be in principle the different measurement of the same asset. Again, valuing methodology as current very much focuses on potential of economic deliverables with no clear indication how to monetarily measure social, cultural, regulatory and supporting services of such assets.
Therefore, we would like to recommend that the central framework of SEEA should focus on provisioning services among four types of ecosystem services.
This would strengthen the role of SEEA as macro indicators of natural assets linking to economy, while SEEA experimental ecosystem accounts would cover much broader sense of ecosystem services, i.e. the latter three services listed.
As the SEEA Agri is developed in the future, we will be in a better position to provide further comments on the above.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Depletion of biological resources (§80 - §84)
FAO comment: The last sentence of §80 is self-contradictory. If the population structure is not sustainable, that population will collapse even without extraction by human beings. The suggested modification can be: “Where the population structure under extraction is not in the sates to be able to regenerate the extracted portion, the extraction cannot continue indefinitely and ongoing extraction will result in depletion of the resources in physical terms.”
Description of §82 contains fundamental errors in concepts. The “sustainable yields” is the amount of harvest corresponding to the regenerated resources in excess to those required for the maintenance of the population itself. In the other words, any harvest over sustainable yields will cause change of stock status (i.e. ‘depletion’ in the cases where the resource was already fully exploited). On the other hand, the biological resources can be harvested in a sustainable way by maintaining harvest under sustainable yield level, even biological resources are over-exploited and in really bad shape in the sense of fishery management view point. Using maximum sustainable yield (MSY) as the point to define ‘depletion’ is extremely dangerous and totally unacceptable from fishery management view point. Harvesting much lower than MSY will lead to extinction for over-exploited resources. Possible proposed amendment is as follows:
“In the case of animal resources the biological model considers that the potential rate of regeneration will increase when the population density decreases and therefore there should be a point where the population can regenerate maximum amount in excess those required for maintenance of the population. A sustainable yield is a level of harvest that ensure that the population being harvested does not cause a change of population level. Maximum sustainable yield is the largest harvest potential if the resource is in a right condition. There are biological models to assess the resource condition and sustainable yields that take age and sex structures and other factors affecting population dynamics into account. It is possible to record such assessment results in physical terms. However, due to significant uncertainties of such assessments, it is important to record all harvest and investment utilized for that harvest which gives a relative indication of the size of resources. In physical terms harvest in excess of the maximum sustainable yield represents depletion of the biological resource unless the resource is at under-exploited level, which can also be identified by decline of relative indicator of the size of resources.”
As the SEEA Agri is developed in the future, we will be in a better position to provide further comments on the above.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?As the SEEA Agri is developed in the future, we will be in a better position to provide further comments on the above.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?As the SEEA Agri is developed in the future, we will be in a better position to provide further comments on the above.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? As the SEEA Agri is developed in the future, we will be in a better position to provide further comments on the above.

Part III: Any additional comments including those of a more technical nature Chapter5-FAO.pdf;

30/06/2011

Philippines/National Statistical Coordination Board

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe contents of this chapter is more or less balanced. The basic concepts for the asset accounts are now clearly discussed.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. Paragraph 140-141. These two paragraphs can be rephrased in such a way that it will include the limitation/s of using the social discount rate so the recommended discount rate to be used will have a firmer basis.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes. This section defines what should be accounted for the government and the private extractor of the resources. However, the discussion on the payments to the government should be expounded to include more examples of the forms for payment to the government in relation to these resources. There is also the question of accounting for illegal extraction of resources.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes.

Part III: Any additional comments including those of a more technical natureNo further comments

29/06/2011

Spain/National Statistics Institute

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentWe agree on the structure of the chapter, dealing with a wide and complex issue that is necessary to organize taking in account the different environmental assets with specific features.
The balance sheet shows the consecutive items in a right way.
Regarding the coverage of the chapter we consider that it could be possible more development of the accounting for soil resources to include the account structure, as in SEEA 2003.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Regarding the environmental assets definition, “as the naturally occurring living and non-living components of the Earth, together comprising the biophysical environment, that are used in production and that deliver ecosystem services to the benefit of current and future generations”, we consider that is necessary to remove the reference to the use in production, and to explain clearly the relationship with the production activities, moreover including some examples.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. The depletion of assets is defined according to the SNA 2008 (chapter 12). In particular, what is convenient is that this issue were considered adopting the approach of the SNA 2008.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. We consider that the description of the net present value approach is highly developed.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes. The treatment in SEEA must follow the recommendations draw up in SNA 2008 (chapter 17).

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No opinion.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?The probable and possible resources must be included in physical terms, but the monetary value is more imprecise because the economic viability is not confirmed, and that value could be removed from the SEEA.

Part III: Any additional comments including those of a more technical natureConcerning section 5.11 ( asset accounts for water resources ) , point 439.i , we are uneasy with the paragraph” Abstraction also includes the use of precipitation for rain-fed agriculture as this is considered a removal of water from thew soil as a result of human activity ( e.g agriculture) . Water used in rain-fed agriculture is thus recorded as an abstraction from the soil water “
We think that the concept of “ water used in rain fed agriculture “ is not easy to define and might raise methodological problems regarding the international comparability of these volumes of water.

28/06/2011

International Monetary Fund

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThis chapter is improved in presentation, technical contents and structure in comparison to SEEA 2003 chapter on asset accounts.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. However, to bring further clarity to the definition of environmental assets, ecosystems and ecosystem services should be defined in the first instance. Four types of ecosystem services are described in paragraph 10. A general / proper definition of ecosystems and also ecosystem services would be useful. United Nations 2004 Millennium Ecosystem Assessment (MA), a four-year study involving more than 1,300 scientist’s worldwide, grouped ecosystem services into four broad categories: provisioning, such as the production of food and water; regulating, such as the control of climate and disease; supporting, such as nutrient cycles and crop pollination; and cultural, such as spiritual
and recreational benefits. Therefore, the above four broad categories may be mentioned in the paragraph 10 in the place of present classification. Paragraph 38 mentioned that “most environmental assets are part of natural resources”. It has to be more specific and provide the list of environmental assets that are part of natural
resources.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. In addition, it is essential to provide clarification on the following issues to improve the quality of the contents.
Paragraph 118: Providing summary of guidelines for estimation of user costs (based on OCED manual on measuring capital 2009) would be useful.
Paragraph 125: It is mentioned that “where the resource access rights that have been allocated are not consistent with maintenance of the environmental asset…” This needs further clarification, as to what are the benchmarks to assess whether resource access rights are consistent with maintenance of the environmental asset or not?

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. The NPV method for valuation of stocks and the measurement of depletion and revaluation in section 5.4 and Annex 5.1 is improved in comparison to SEEA 2003. Inclusion of a numerical at the end of Annex 5.1 to illustrate the estimation of depletion using this approach is suggested.
Choice of discount rate (138-142): It is a well known fact that the choice of discount rate is quite difficult and proper choice of discount rate is an important step for compilation. However, the need for mentioning “the choice of discount rate has been a controversial issue for many years …” is not understood. This would create confusion among
compilers in relation to choice of a discount rate. Further, it is mentioned that there is strong support for the use of social discount rates in the valuation of environmental assets. Definition of social discount rate has to be provided in paragraph 141. It is essential to mention that determining this rate is not always easy and can be the subject
of discrepancies. Overall, further elaboration on this issue of social discount rate in connection with valuation of environmental assets would be useful.
It is stated in paragraph 153 that the use of NPV for environmental asset undervalues environmental assets relative to other assets and may give a misleading picture of the investment options available to a nation. If it is the case, rational for suggesting this approach need to be clarified further.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No. Accounting for the ownership of mineral and energy resources: The conceptual rationale for suggesting this approach is not elaborated and we wonder whether it exists. It seems that this approach is suggested to account for depletion in the account of the extractor. If this is the sole purpose, then the accounting for depletion should be done through adjustment items rather than artificially imputed transactions. There are a number of
issues:
The existence of separate legal and economic ownership is not an issue. A case of joint economic ownership would involve partitioning all flows and positions. We do not consider that this is what is being described. Even then, not all government ownership will involve joint economic ownership. One should have clear criteria for distinguishing
cases that would involve joint economic ownership from those that would not involve joint economic ownership. Cases where full rent based on market is paid do not involve joint economic ownership.
The chapter 5 deals with asset accounting (stocks and flows). Therefore, we do not understand the relevance of table 5.5.5 and the discussion on full sequence of accounts in this chapter.
We do not support introducing artificial imputed transactions, such as the depletion transfer. Such an item is not consistent with the 2008 SNA definition of transactions and transfers.
In our view, the depletion element of rent should be accounted for through adjustment items for deriving depletion adjusted national accounts aggregates.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes. As the focus of SEEA is on environmental assets, the scope of SEEA is broader than the 2008 SNA in relation to measurement of environmental assets, specifically the measurement of mineral and energy resources. Therefore, we support the idea of inclusion of all known deposits within the scope of mineral and energy resources. As this approach is resource intensive, most of the countries may like to limit the scope of measurement to proven deposits that are within the 2008 SNA asset boundary. Nevertheless, we support a broader scope for SEEA. We suggest that the overlap between SNA asset boundary and SEEA asset boundary for all environmental assets are clearly explained.
Weighting is a good idea. However, selection of weights is an issue to deal with carefully. Suggested approach of weighting pattern based on the likelihood of extraction appears to be too much hypothetical and we do not agree.

Part III: Any additional comments including those of a more technical naturePresentation of a table on links between 2008 SNA and SEEA classifications (similar to table 7.7) would be useful.
Clarify the terminology of fish resource used in this chapter in relation to aquatic resources used in SEEA 2003.
Paragraph 34 (valuation): There is a mention of assets without monetary value. It is stated that those assets without monetary value should be clearly distinguished. Specific examples may be provided.
Definition of economic assets (paragraph 36) is not in line with 2008 SNA and needs a change.
In most of the tables, item/category codes are missing (like the one used in table 5.3.2)
Conceptual form of physical assets account (Table 5.3.1): Two more columns for soil resources and other biological resources have to be added.
Paragraph 67: change “full suite of institutional sector accounts…..” to “full set of institutional sector accounts…..”.
Land use classification presented in table 5.6.1 (annex A5.3) is based on FAOSTAT. However, the category M on land not in use is ambiguous. Most of the countries use “land n.e.c.” Why can’t the same terminology be used for this purpose?
Monetary asset account for land (Table 5.6.7): In the recent past some countries added large areas of land to their existing land through reclamation (Singapore and Maldives). How to account for them? As additions on account of acquisitions? Only four types of land use are presented in the table. It is suggested that the land not in use (land n.e.c.) may be shown separately and not to be mixed with other land and water areas.
For soil resources, it is suggested to include a table on physical asset account with major types of soils for which account has to be prepared.
Paragraph (5.85): It is suggested to explain in brief, carbon accounts and their relevance. Asset accounts for fish resources (5.9): cultured and cultivated are used interchangeably throughout this section (for example, cultured fish or cultivated fish). To be consistent, it is suggested to use either one of them. Virtual population analysis is explained in brief and a supporting numerical example is suggested.
Estimating resource rent (Paragraph 408): Here it is mentioned that the artisanal fishing yields to mixed income and showed in production account. This has to be corrected, as mixed income appears in generation of income account.

28/06/2011

Turkey/Turkish Statistical Institute

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe chapter as a whole is not detailed enough for really new beginners, since definitions and explanations are so general. Some clearer definitions and examples (especially for economic accounts) are needed.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. The classification should be detailed to the second level in order to clear which asset should be under which item.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?No opinion.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. Additional explanations would be beneficial.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No opinion.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No opinion.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion.

28/06/2011

Australia/Australian Bureau of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentOverall, we think this is chapter is a very good piece of work. Structure is appropriate and readability is excellent.
The chapter is quite long and is weighted toward economic considerations. Reduction in chapter length would be welcomed if it occurred in the area of discussion of the monetary asset accounts. Accordingly, we are pleased that the NPV discussion now substantially sits in its own Annex.
We acknowledge and agree that it is important and useful that accounting for ecosystems occur in a separate volume of the SEEA. We see no serious omissions from this chapter.
Please note that these Australian comments reflect consolidated input from the ABS; the Bureau of Meteorology (BoM); the Commonwealth Scientific and Industrial Research Organisation (CSIRO); the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES); the Department of Resources, Energy and Tourism (DRET); and the Department of Sustainability, Environment, Water, Population and Communities (SEWPaC).

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. Overall we agree with the definition of environmental assets presented in this chapter. However, we wish to note a number of points. [attached] Chapter5-Australia1.pdf;

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. Depletion of non-renewable natural resources is dealt with appropriately.
Need to state up front (in para 76) that depletion = extraction only for non-renewable resources. And that for renewable resources, a measure of depletion must consider extraction and regrowth.
In the measure of depletion of renewable resources we are not clear on the accounting and also on the use of the concept of maximum sustainable yield. In particular, the stock of fish which delivers maximum sustainable yield (MSY) being the line from which depletion is calculated appears to be inconsistent with Australian fisheries management practice, which uses the concept of maximum economic yield. So while it is recognised that a line for calculating the depletion of renewable resources needs to be drawn, it is not clear if MSY is the best concept to use for this nor is it clear how a flow measure (i.e. yield) can be used for a measure of a depletion of stock. This issue and the accounting need to be clarified.
The statement that Virtual Population Analysis is the most reliable method used in modelling fish population is challenged by the producers of Australia’s peak fisheries statistics. We suggest that the following text in para 381 “is the most reliable method when…” be changed to: “is considered a reliable method when…”.
Final sentence of para 80 uses ‘depletion’ where ‘reduction’ is more appropriate (given the precise meaning attached to the term ‘depletion’).
We agree strongly with the described relationship between degradation and depletion in para 86.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. We agree with the methods set out in the chapter.
Nevertheless, we note that the discounting of future expected benefits favours present generations over future generations. The effect is exacerbated because the negative impacts of human activity on environmental assets tend to be realised later than the benefits.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Agree.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No. ‘Known deposits’ exclude potential deposits where: there is no expectation of the deposits becoming economically viable; there is a lack of information to determine feasibility of extraction or to have confidence in the geological knowledge. This is appropriate. The (general) use of NPV to value these resources means that any such resources extracted more than 25 years into the future will generally have a negligible present value. Again, this is appropriate.
We do not see the justification to somewhat arbitrarily assign a weight based on ‘likelihood of extraction’ in order to adjust values of various classes of resources. Where are the parallels in the standard SNA assessment and valuation of assets? On the contrary, for example, a safety railing in a factory (or certain items of military hardware) constitutes an economic asset – and this position is (correctly) taken independent of consideration of expected subsequent use.

Part III: Any additional comments including those of a more technical natureWe have suggested alternative text for sections 5.7.1 – 5.7.5, related to ‘accounting for soil resources’. See attached word file (Author Mike Grundy, CSIRO). Chapter5-Australia2.pdf;

27/06/2011

Brazil/IBGE

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe structure of the chapter is clear, the sequence of items makes easy the comprehensibility of the message.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. The definition achieve the objective of extent the asset concept to include important environmental issues without loose the compatibility with the definition os economic asset as recommended by SNA.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. In general terms or theoretical terms the recommendations and explanations of the depletion of renewable resources in physical terms discussed in the section 5.4 are clear. However there is a strong dependence of biological models to measure these accounting entries in the asset accounts, mainly in terms of natural grow of biological resources. Is clear that is needed, for example, to measure the natural grow of trees in the forest account, to obtain classes of age of planted forest and other naturally regenerated trees associated with the respective area to use as inputs in the models and it is not easy to obtain using remote sensing techniques, The accuracy, of the estimative is dependent of the scale of the satellite images.
About the Annex A5.1 I do not have comments because IBGE, at this moment, is not working with valuation issues and the use of NPV method. The efforts are concentrated on measurement of assets in physical terms.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No Opinion. IBGE, at this moment, is not working with valuation issues and the use of NPV method. The efforts are concentrated on measurement of assets in physical terms.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No Opinion.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No Opinion.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No Opinion. The chapter is not enough clear about the advantages and disadvantages to use an scope different from SNA and SEEA.

Part III: Any additional comments including those of a more technical natureNo comments

27/06/2011

Statistical Economic and Social Research and Training Centre for Islamic Countries (SESRIC)

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentOne of the difficult issues covered in Environmental Accounting is the valuation of environmental assets; sometimes for some assets (soil, land and groundwater resources etc.) it is difficult to compute accounting tables (both physical and monetary terms) due to data non-availability. By considering this fact this methodological guideline can be enriched by putting some successful case studies (e.g. already computed accounting tables) and so, this may make theoretical explanations understandable.
Also some explanations can be given if there is a tremendous revision when it is compared with the previous version.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No. It is more concentrated on delivery of the ecosystem services of environmental assets, but the term “delivery of ecosystem services” is not clear enough.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No. Explanations is not enough, it would be better if it is supported with sample calculations

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes.

27/06/2011

Singapore/Department of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentIt is fairly readable and comprehensible.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. In Singapore’s context, wastewater and seawater are also considered as water assets.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. Further elaboration may be necessary to consider (i) how the quality of the water would affect the measurement of the value of water and (ii) how water recycling and replenishment rate affect water resources.
Section 5.10 (Accounting for other biological resources) seems to include only the tangible aspect of non-cultivated animals and plants, e.g., harvested wild plant products, bushmeat that is bought, sold or for own consumption. It may be useful to consider the intangible aspect of ecosystem assets, e.g., nutrient cycling, community structure, amenity and existence values.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No opinion.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No opinion.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion.

Part III: Any additional comments including those of a more technical natureFor the asset of land, Table 5.3.1 indicates “not applicable” for growth in stock, extractions and upwards and downwards reappraisals but there could be exceptions. For “growth in stock”, land reclamation is always a possibility. For “extractions”, changed sea levels will make this category relevant, especially as a percentage of land area for some small island states. There could be greater clarity on the treatment of the above examples and whether they should be considered as “reclassification” or otherwise. For “upwards and downwards reappraisals”, there could be a variety of available figures for any given country, and reappraisals could occur.
Although peat soils are classified as a mineral resource and energy resource (Para 175), they are also considered as a soil resource. This raises a question as to whether there is any double accounting, e.g. for agricultural land. Some countries have substantial forest areas growing on peat; if the peat were extracted for mineral or energy use the forest could not grow back, and if the forest is removed the peat begins to shrink and decay. The accounts do not seem to take these interactions into consideration.

27/06/2011

France/Ministry in charge of Ecology

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentWe find this chapter very well presented and the major part of topics seems to be present.
In terms of balance between the different sections, the one related to soil resources is clearly less developed than the others.
At some places references to literature works or to a set of assumptions seems missing. It is especially the case for the decomposition of the resource rent into two components (depletion and return to environmental assets).

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. We wonder if there are cases where the government establishes the market conditions enabling a certain level of depletion of the resource.
The main issue is probably the insufficient knowledge on the size of different stocks (especially fish) and on the impact that a certain level of capture will have. The lack of information often prevents from setting a level of price ensuring a long term visibility to a renewable resource.
Lastly, in the table 5.4.1 (§112) the decomposition of the resource rent into two components should be justified by adding a reference to the change in value equation (formula (11) in the annex, page 94: Vt-Vt+1 = Rt+1 – rVt).
Furthermore, it is important to indicate the theoretical framework justifying the existence of a return to environmental assets (natural capital theory). Therefore it should be explained in this paragraph 112 that this vision of ressource rent as the sum of depletion and a return on asset is due to the equality of the discount rate r and the rate of return to environmental assets, assuming economic optimum, as indicated in §139. Indeed, this paragraph explains that the precondition for such a framework is when conditions of pure and perfect competition prevail.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. We find the annex 5.1 very interesting and relevant since different assumptions or cases are considered and described, which allows a more practical understanding of the depletion measure.
We just noticed that some formulas are missing in the pages 94-95 (§21 to 26).

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes. However, a separate valuation for the three different categories (notably between probable and possible deposits) seems difficult in practice or needs questionable assumptions. Indeed, the level or degree of knowledge of a deposit, on which the UNFC classification is based, incontestably comprises some subjectivity. The resources level of a mineral deposit relies on the arbitrary choice of a "cut-off grade". The actors of a project thus have full discretion to estimate resources and are not likely to be contradicted by reality since the resources are neither exploitable, nor verifiable.
Further, it is important to note that UNFC is not the unique classification at an international level (CRIRSCO system).
Lastly, we regret that the table proposing the different classes of mineral and energy resources presented in the issue 11 has not been kept for this chapter since it was more detailed than the ones presented in section 5.5.3.

Part III: Any additional comments including those of a more technical nature* Figure 5.2.1 p 10
We are not sure of the relevance of the distinction between economic benefits and no economic benefits since every listed asset is concerned by both. "No economic benefits", does it mean "other environmental benefits"? If yes, we would prefer this last expression.
§ 76
In order to avoid any ambiguity in the second sentence, we would prefer formulating "Depletion is not concerned by the case of a reduction…"
§ 87
We suggest giving some examples of ecosystem services delivered by different assets functioning together.
§ 88
We are not sure to correctly understand the problem apparently exposed in the last sentence. The issue should be made clearer.
§ 94 and § 98
Firstly, it would be useful to indicate the hypothesis backing the theory.
Secondly, we should add in these paragraphs that in the case of environmental asset, a special care needs to be taken when using market prices, which sometimes don''t reflect the objective economic conditions resulting in the confrontation between supply and demand : market prices have to allow to deduce the implicit economic price signals, once neutralised the blurring volatility effects (bubbles, speculation...). Unfortunately, in case of markets functioning correctly, the price of the assets will not systematically reflect the real conditions of sustainability.
Proposal to start §94 with: “Ideally, with perfect markets conditions, and once neutralised the undesired volatility effects in order to measur the implicit economic price signals, observable market prices ...”
Proposal to stard §98 with: “The ideal source of price observations for assets are values observed in perfect markets in which...”
§ 101
The last sentence needs to be reformulated to make it clearer: may be “were the asset to be offered for sale” meant “when the asset is offered for sale” or “if the asset were to be offered for sale”.
§ 194
We are not sure to understand the second sentence, which should be reformulated. Additionaly, wouldn’t it be rather "in reconciling the asset value and the income flows…"
§ 238
In the second sentence, it would be preferable to use the same terms than those mentioned in the table. So, "The four categories are agricultural, forest and aquacultural land…"
§ 240
We would support to put the protection of nature item into a more identifiable category than diluted as it is in the category "land not in use", which gathers a lot of various areas.
§ 301
We think that erosion results not only in a loss quantity of a certain type of soil. Changes in soil components or properties are also a quality issue. So, we wonder if depletion should encompass the overall changes in the soil composition that lead to a productivity decrease.
§ 344
Second sentence: "When a catastrophic event does not fully destroy the wood, it is necessary to take into account the value of the wood that will be salvaged.
§ 346
"…the value of the standing timber is reduced to zero."
We probably need to recall that here only economic benefits are considered and not other environmental benefits provided by ecosystems.

24/06/2011

United States/Bureau of Economic Analysis

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No.
1. The SEEA 2012 definition of “environmental asset” is not sufficiently exact. In particular, it refers to delivering “ecosystem services” which are not defined anywhere else in the text. (Paragraph 10 states that ecosystem services can be further re-classified in to four types, and gives some examples, but this does not constitute a definition.) The draft does not provide any boundary that can be used by a third party to identify what is and what is not an “ecosystem service”. Such a boundary is standard in classification and measurement guidelines.
In contrast, the three economic activities recognized by the SNA 2008 (consumption, production, accumulation) are well-defined (consumption has SNA 2008 9.39 devoted to its definition; production has SNA 2008 6.2, for example). Moreover, these three activities encompass many known examples of ecosystem services (e.g. water supply and purification, pollination, carbon-binding, amongst others). We therefore recommend that the definition be changed as follows (paragraph 14):
“Environmental assets are defined as the naturally occurring living and non-living components of the Earth, together comprising the biophysical environment, that are used in production, consumption and accumulation.”
The SEEA 2012 can then refer to the SNA 2008 for exact definitions of consumption, production and accumulation. Paragraphs 9 through 14 should not refer to the ill-defined term “ecosystem services” in the discussion of environmental assets.
Note that “accumulation” encompasses services ascribed to future generations, and thereby covers the “core issue of sustainability” (c.f. paragraph 13). The prerequisite of economic ownership required for “economic assets” remains absent from our suggested definition.
2. It appears the SEEA 2012 definition of “economic asset” is intended to be the same as the definition given in the SNA 2008. (See paragraph 38, for example.) However, the definition given in paragraph 36 is not the same as that given in the SNA 2008: “An economic asset is a store of value representing an economic benefit or series of economic benefits accruing to the owner by holding or using an entity over a period of time.” Compare this to SNA 2008 3.30: “An asset is a store of value representing a benefit or series of benefits accruing to the economic owner by holding or using the entity over a period of time,” and from SNA 2008 3.31 “All assets in the SNA are economic assets.” The definitions for economic assets should be exactly the same to avoid any potential confusion.
If we have misinterpreted the text, and in fact the definition of “economic asset” in the SEEA is to be different to that given in the SNA, then the SEEA must define “owner” and “economic benefit.” (Note the SNA distinguishes between “legal” and “economic” ownership, and defines “benefit” but does not define “economic benefit.”)
3. Paragraph 34 permits environmental assets with zero benefits to fall within the asset boundary: “It is possible that for certain types of environmental assets there are instances of assets within scope of the definition that do not have a monetary value.” The primitive meaning of the term “asset” implies there is some monetary value ascribed to the entity. This monetary value does not necessarily imply that the asset can be traded at a price in a transaction. If the entity has no monetary value in what sense is it an asset? Under our suggested definition in (1) above, entities that do not yield positive consumption, production or accumulation would not be considered environmental assets and would fall outside the boundary.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes.
The section appears to state that for biological resources depletion is equal to extraction less natural growth, subject to some adjustments to take into account heterogeneity in the breeding potential of the stock (outlined in paragraphs 80 -84). This point however is not crystal clear. We suggest that to make the point absolutely clear, paragraph 78 be altered as follows:
“The ability for the resources to regenerate naturally means that under certain management and extraction situations, the quantity of resources extracted may be matched by a quantity of resources that are regenerated and hence there is no overall physical [line thru ''using up''] depletion of the environmental asset”
Section 5.4 also discusses the relationship between depletion and degradation in paragraphs 85-89. Paragraph 86 states that depletion is a subset of degradation (“In this sense, since depletion relates to one type of ecosystem service, it can be considered as a specific form of degradation”) This is inconsistent with outcome paper 14 (Recording of natural resource depletion for renewable resources), in which paragraph 36 listed degradation as an additional source of change in the asset value to depletion. We suggest that that depletion and degradation be defined as mutually exclusive concepts accordingly.
Paragraph 86 defines degradation in terms of the asset’s ability to provide ecosystem services (“Degradation considers the broader capacity of the environmental asset to deliver the full suite of ecosystem services”) This definition is unnecessarily restrictive; in particular it precludes reduction in quality of natural resources that do not provide ecosystem services. Paragraphs 85 through 89 should therefore define degradation in terms of a change in the quality of the asset, as this covers the full set of environmental assets.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. Selecting a discount rate is not straightforward. The guidelines could recommend that the sensitivity of the NPV calculation to the discount rate be explored by providing supplementary valuations using a high and a low discount rate. This recommendation could be incorporated into paragraph 144, in much the same way as paragraph 145 states that “compilers are also encouraged to compare results of NPV calculations […] using different calculations of the resource rent.”

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes. From paragraph 220 iii: “In the allocation of primary income account in addition to the flow of rent from the extractor to the government a return transfer should be shown – a depletion transfer – representing the amount of depletion incurred by the government on their share of the resource.”
We may also wish to point out that this treatment also ensures that expenditure-based measures of output are unaffected by Government ownership of resources. (Depletion, treated analogously to depreciation, would increase government spending since “G” is measured at cost.)

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No. We disagree with paragraph 193: “If an aggregate value across classes of resources is to be estimated it is further recommended that a weighting pattern based on the likelihood of extraction be applied to the different classes”. The likelihood may be reflected in the method of valuation. For example, rights to extract non-commercial deposits may trade at low prices precisely because the likelihood of extraction is low.
It would seem that a weighting based on probability of extraction would be appropriate only for certain valuation methodologies.

Part III: Any additional comments including those of a more technical natureFrom paragraph 127. “In practice, depending on the choice of discount rate, if
asset lives are longer than around 20 years, the NPV estimates are relatively stable.” This statement only true for constant (or stable) extraction rates. To Illustrate: if all the extraction is going to occur beyond the 20-year horizon, then clearly the statement is false. This issue is particularly relevant for environmental assets that are being rebuilt (e.g. managed fisheries), since current harvest rates are restricted in anticipation of greater harvest rates in the future.
From paragraph 139: “the discount rate and the rate of return on produced assets should be equal.” This statement is against prevailing economic theory, and contradicts paragraph 138. Discount rates reflect risk, and the future income streams of different produced assets have different exposure to risks. For example, a factory producing food is less exposed to risk than a factory producing cars, since food is a necessity whereas a car is not.
From paragraph 141: “a zero social discount rate implying that there is no preference between whether the current or future generations receive the income for the assets.” From paragraph From paragraph 138: “In general, individuals and businesses will have higher rates of time preference than governments.” The zero discount rate is a controversial topic amongst academics (e.g. Nordhaus, “Critical Assumptions in the Stern Review on Climate Change,” 2007). It is not the role of SEEA to weigh-in on such unresolved issues.
From paragraph 152: “the use of a market-based discount rate will tend to place very little weight on income earned by future generations and indeed the value of income streams earned beyond about 20 years from the assessment date are quite small. This is interpreted in two ways. First that NPV market-based approaches do not value future generations and second, that the total values obtained are too small since they do not place sufficient value on these future incomes.” This is the “prescriptive approach” to determining the discount rate, whereby the discount rate is determined by some ethical norm. In contrast the market based discount rate is an example of the “descriptive approach,” whereby the discount rate is grounded in the actual prices faced by policymakers. Both approaches have their benefits and costs. For example, the descriptive approach gives a decision maker information about the opportunity cost of an action. It is not the place of SEEA to take sides in the debate of which method is better, and if the SEEA is two discuss the benefits and drawbacks of the two methods, we request that the discussion be balanced. (In particular, a discussion of the drawbacks of the “prescriptive” method must be included.)
The statement “market based methods do not value future generations” is not true.
Paragraphs 284 -288 make the case for land units to be the basis for ecosystem services. We have concerns with this classification as the basis for the provision of ecosystem services. For example, the Catskill mountain range in New York, which provides water purification services for the city of New York, would be classified as “forest tree cover.” However, it is not the case that all land classified as “forest tree cover” provides water purification services. Given that the structure of SEEA volume 2 is unknown, we recommend that section 5.6.6 be omitted.

24/06/2011

Slovak Republic/Statistical Office of the Slovak Republic

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentSections for particular Environmental assets accounts should be more balanced - some of them are quite detailed, others much less – especially section 5.7: Accounting for soil resources and 5.10: Accounting for other biological resources.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No. We support the Norway opinion.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?No opinion.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No opinion.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No opinion.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion.

24/06/2011

Portugal/Statistics Portugal

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe document is clear and concise. Nevertheless, we would like to suggest more numerical examples, in order to better illustrate the methodologies.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. We only suggest a small correction in §39. Instead of “(…)while those providing once-only inputs (such as trees for timber) are considered inventories” we suggest “(…)while those providing once-only inputs (such as certain trees for timber) are considered inventories”, since some trees, like eucalyptus, may be cut and grow back.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?No opinion.
In spite of not having an opinion on the presented methodology, we would like to present some comments concerning this section:
1. We consider that table 5.4.1 is not very clear;
2. §104 – for NPV we have some reservations concerning price projections for long life trees like pine (40 years) or cork trees (more than 100 years);
3. §117 and §118 – these paragraphs state that estimates of gross operating surplus and fixed capital consumption are obtained from national accounts. However, national accounts work with NACE detail. Can this cope with the detail intended for assets accounts? (for instance, forestry integrates timber resources and other biological resources – cork – not being possible to isolate the gross operating surplus of each component).

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No opinion. We consider that it will only be possible to have a solid opinion after testing data sets. Nevertheless, we consider that the evaluation of assets should be done both at current and constant prices.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes.

Part III: Any additional comments including those of a more technical natureWe consider the presented methodologies quite interesting from a theoretical perspective. However, we consider they demand huge sets of data and some specific technical knowledge that sometimes is not available in National Statistical Institutes. In a context of resources constraint, the development of such a project would have to imply the definition of negative priorities.

24/06/2011

Statistics Netherlands

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentA clearly written chapter. Style is to the point.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. We agree with the broad definition of environmental assets. However, we feel that the definition of environmental assets could be clarified and explained a little bit better. For instance, are ecosystems recognized as assets, yes or no? And, how do environmental assets relate to uncultivated assets as introduced in the SNA.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. We agree with the definition and measurement of depletion. The distinctiom made between the unit resource rent and the price of the asset is clear and is helpful in dealing with issues that were discussed previously in the London Group such as ‘positive depletion’. We have two small comments on annex 5.1: There appears to be a small mistake in para 14, in case r equals ρ (rho), omega (Ω) equals N (and not 1), and as a consequence Pt should equal Pst. Second, in para 20, according to our understanding, there is no need for the item ‘revaluation due to changes in the information set’ as the decomposition between opening and closing stock (formula 9) is exact.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No. We agree that the asset boundary should be broader than as defined in the SNA, but at the same time needs to be smaller than known deposits. We favor defining them as proven + probable (or best estimate), for reasons of international comparability.
As a result, we see no need for weighting.

Part III: Any additional comments including those of a more technical nature§18. First sentence is not clear.
§23. Soil is in addition to land an asset not providing physical inputs.
§63. The use of natural assets in this context should be explained (in contrast to uncultivated asset). Please explain briefly the differences. (ecosystems?)
§87. Does this paragraph imply that acidification of timber forests resembles depletion?
§89. At least the pressures leading to degradation are measured in the central framework.
§112. Mixed income does not get the same treatment since split of labour and capital is needed.
§175. I disapprove the known resources definition, particularly in the context of monetary asset accounts.
§192. The SEEA should be more prescriptive in the physical definition of the resource and the classed to incorporate. The ‘known’ definition is a very weak starting point in this respect.
§250. I would not mention rising sea levels in this context (as if this happens on large scales all the time. In terms of climate change were not there yet).
§272-§280. Why is soil not mentioned as an example of composite asset (in connection to land)?
§296-§302. Accounting recommendations for soil are rather thin. Should this not be moved together with the ecosystem accounts?
§309. The growth of natural timber resources is not really measured in terms of production. Rewording is advisable.
§310. For clarity reasons I would restrict the criteria to those defined cultivated (items i. & ii. do not provide very much guidance).
§377. Why is wild fish resources used and not natural fish resources (in contrast to cultivated fish resources)?

24/06/2011

Macao, China SAR/Statistics and Census Service

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No opinion.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No opinion.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion.

24/06/2011

Malaysia/Department of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentAcceptable

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.
• Please specify clear definition of living & non-living components.
• The individual components in Table 5.2.1 should be identified by the type of living & non-living components.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?No comment

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No comment

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No comment

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No comment

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No comment

Part III: Any additional comments including those of a more technical nature1. The Department of Statistics Malaysia (DOSM) has no experience in developing any environmental account using the SEEA framework. However, DOSM is currently collecting data on environmental protection expenditure and trying to develop one of the SEEA account.
2. DOSM face constrains in developing this account with lack of expertise in this field.
3. DOSM also wants to learn in detail how to develop the SEEA account. Please inform and include us if there is any training/workshop to be conducted in future.
4. Therefore DOSM is unable to contribute fruitful comments for the revision of the SEEA at this moment. However, DOSM would like to be involved in further development of this matter.

24/06/2011

Hong Kong, China/Census and Statistics Department

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThis Chapter is useful for statistical agencies to better understand environmental assets in the SEEA.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. There are a number of international guidelines on environment statistics. The definition and classification of environmental assets given in the SEEA should be harmonised with other international guidelines, where applicable.
More elaboration on the conceptual difference between “environmental assets” in SEEA and “natural resources” in SNA could be included. In particular, the 2008 SNA covers “radio spectra”. Is it included in “environmental assets” in SEEA and what is the rationale for such treatment?
Figure 5.2.1 may be modified to better illustrate the relationship between “economic assets” and “environmental assets”. For example, the Figure may present more explicitly that cultivated biological assets are covered in both “economic assets” and “environmental assets”, whereas other natural biological resources, being covered in “environmental assets”, may or may not be covered in “economic assets” subject to the condition whether they are yet expected to provide economic benefits to the owners.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. Section 5.4 and Annex 5.1 are useful in illustrating how to measure depletion in physical and monetary terms theoretically.
It would be more desirable to include practical examples for individual environmental assets in the Chapter in order that statistical agencies would better understand how depletion could be measured.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. Section 5.4 and Annex 5.1 are useful in illustrating how to measure environmental assets in monetary terms theoretically.
It would be more desirable to include practical examples for individual environmental assets in the Chapter in order that statistical agencies would better understand how environmental assets in monetary terms could be measured.
Besides physical and monetary asset accounts for environmental assets (such as land, biological resources and soil resources), the user bureau would like to enquire whether there are any tools for estimating the cultural value, e.g. amenity and religious value, of some of these assets.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes. Access to natural resources is often issued in the form of permits. Specific guidelines are given in 2008 SNA paragraphs 17.313 – 315 and paragraphs 17.340 - 343 for explaining different possible situations which lead to different economic ownership and hence different statistical treatments. Does the same concept apply in SEEA? If so, more explanations may be given or reference to relevant 2008 SNA paragraphs may be included. The differences between SEEA and SNA (if any) could also be highlighted.
As there are a number of international guidelines on energy statistics, definition and scope of energy resources given in the SEEA should be harmonised with other international guidelines, where applicable.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No opinion.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion.

Part III: Any additional comments including those of a more technical natureTable 5.6.7: Monetary asset account for land (monetary unit)
As mentioned in Table 5.3.1, reduction in land caused by catastrophic losses is not significant. However, some catastrophic losses such as radioactive contamination, abnormal flooding etc. may deteriorate the quality of land such that the monetary value of land may be affected though not the physical units. In SNA 2008, such losses are recorded as “catastrophic losses” under “other changes in volume of assets” instead of revaluation. What is the statistical treatment of changes in monetary value of land caused by catastrophic losses for SEEA?
To facilitate international comparability, it is suggested that standards, measurement criteria and calculation methods could be formulated more clearly with practical examples for consultation by countries/territories and incorporated as part of the SEEA. UNSD may consider organising seminars or workshops on the SEEA so that statisticians can have the opportunity to share and discuss the methodology, examples and difficulties.

24/06/2011

Lebanon/Central Administration of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing content• 5.7 – Accounting for soil resources should be more developed
• 5.10 – Accounting for other biological resources should be more developed

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. Annex 5.1: The Net Present Value method is excellent. We need this mathematical approach through all the document.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes of course

Part III: Any additional comments including those of a more technical natureGood elements:
• Good tables associating definitions with some calculations
• Annex 5.3 – Land classifications is exhaustive and very clear
Critiques:
• Need for a more mathematical approach and equations when addressing definitions and operations and not only saying add or remove.
• An X appears instead of the equations in page 94. Formatting problems?
• Sub-paragraphs are not evident (p.30 as an example, but there are also plenty of other cases). Why don’t you use the bullets and numbering system?
Question:
• P. 31, paragraph 164 – Why this assumption is not made in SEEA?

24/06/2011

Pakistan/Federal Bureau of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe structure of the chapter has been found quite good, balanced and the coverage is quite comprehensive. The text needs to be more simplified particularly the technical terms needs more simplification/clarification/elaboration.

Part III: Any additional comments including those of a more technical nature5.1 Introduction
OK
5.2 Assets in the system of Economic & Environmental Accounts
5.2.1 Environmental Assets definition of Environmental Assets is very comprehensive and may be shortened.
- Classification of environmental assets. OK
5.2.2 Economic Assets
- Definition is Ok; relationship between environmental & economic assets is very elaborative.
5.3 The structure of assets accounts. OK
5.4 Principles of assets accounting para 70 & 71 needs more clarification & simplification.
5.4.2 Depletion of environment assets para 76 the text may be simplified. Para 79 needs more clarification.
5.4.3 Para 91, may be elaborated with example.
5.4.4 Para 117 & 118. The text may be made more clearer.
5.5 Assets Accounts for Mineral and Energy Resources.
5.5.1 5.5.5 OK
5.6 to 5.11 Assets accounts for a range of individual environmental assets, the scope, structure of assets accounts & other relevant conceptual measurement issues have been covered in detail. Practical examples with data may also be included in addition to theory.

23/06/2011

Jordan/Department of Statistics(DoS)

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentWe do agree about the structure and the coverage of the chapter and the efforts behind preparing this chapter are highly gratitude, however it looks like long and not friendly use, particularly, when we consider the full SEEA version. Therefore we suggest that, it could be better to have a shortcut copy with referring to the details in the original copy of SEEA.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No. We agree with Norway opinion on definition of environment assets. “Environmental assets must be (1) used in production AND (2) deliver ecosystem services to the benefit of current and future generations”. We would suggest changing this into “Environmental assets (1) must be used in production OR (2) could deliver ecosystem services to the benefit of current and future generations OR both”.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. We agree with the classification and definitions used in this chapter about depletion which reflect the sustainability.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No. We disagree to use NPV as restricted approach, we can use other measurements depending on the type and nature of assets and availability of information about the assets

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes. We agree, but we have to care more about the details of contracts and the future innovative needs and technologies.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes.

23/06/2011

Denmark/Statistics Denmark

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe text is easy to read and the style and tone is appropriate.
The text provides a good general overview of relevant overall concepts and accounting elements.
The text seems in some cases to be more general and more “loose” than the SEEA 2003.
Some sections are quite detailed, others much less, but probably this reflects the state of the art.
A description of principles for compilation of monetary asset accounts at constant prices is missing.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No. We do not find the definition clear.
1. Strictly, the stated definition requires that environmental assets should be used in production. If this is the intention we do not agree, and find that it is inconsistent with the rest of the chapter, which clearly includes assets which are not used in production.
2. If “used in production and that deliver ecosystem services” should read “used in production or that deliver ecosystem services” we find that the definition is ok as such, although it is doubtful then whether the last part “ which are used in production…” are necessary or useful for the definition. It seems that it does not provide any further qualification to the definition. If the intention is that it should exclude any parts of the biophysical environment this needs to be explained explicitly. However since benefits for the future generations are per definition unknown it is difficult to see that anything can be excluded based on such a definition. We opt for a broad definition which does not exclude anything countries may wish to account for.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?No. The term depletion is used for both the physical and monetary parts. We prefer to maintain the SEEA 2003 separation and to reserve the term depletion for the monetary part, since under the agreed treatment depletion is not the value of the extracted quantities.
The description of the definition of depletion could be clearer in the text, for instance by including some of the description in the outcome paper related to the issue.
We wonder whether the statement in para 343 that the removals is always given by the stumpage value of the timber removed from the forest is consistent with the general approach for valuing depletion. Shouldn’t the stumpage value be reduced with a return to the asset in order to reflect the definition of depletion?

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No. The proposed procedure for NPV related valuation of depletion and other changes in stock seems is based on simplified assumption including that all physical changes affects the extraction profile in the same way. This seems to be inappropriate and not necessary. A catastrophic loss may imply a very different profile compared to a discovery of a marginal new deposit, and therefore the prices would be different.
The description does not clearly distinguish between changes in the NPV results due to revision issues and due to real/actual changes. The treatment of the two types of changes should be different.
Since a discussion of the NPV method is envisaged in relation to the discussion of the SEEA-E we suggest that a final decision on the practical use of the NPV method awaits that discussion.
It would be useful with a description of how market based information can be used if available, and for instance how depletion and income is estimated if real market values
exists for an asset.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No. While we generally support the split between the owner and the extractor we find it disturbing that there is still no satisfactory answer to how the split asset accounts are balanced with respect to the entering of the depletion and the return to asset. The introduction of the “depletion transfer” in para 220 and Table 5.5.5. into the primary income account is somewhat of a mystery, which seems to have no reference to any real world transactions and transfers nor any SNA 2008 accounting concepts.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No. The simultaneous reference to UNFC and to proven, probable and possible is not appropriate, since the UNFC-2009 does not use that terminology. Furthermore, the mapping between the two made in the chapter seems not to be in line with the mapping schemes published by the UNFC expert group.
The three UNFC based classes in Table 5.5.1 are not consistent with the abbreviated version of the UNFC-2009. Generally, the interpretation of the G-dimension seems to be different from the interpretation in the UNFC-2009.
Since a discussion of the classes is envisaged in relation to the discussion of the SEEA-E we suggest that a final decision on the classification awaits that discussion.

Part III: Any additional comments including those of a more technical natureThe generic asset accounts suppress the item of “aquisitions less disposals”, since it is assumed that these are only relevant in relation to institutional accounts. While aquisitions less disposals generally does not occur for environmental assets for the economy as a whole one may think of examples. For instance if a land area is sold from one nation to another. An example, even if it is old, is that in 1917 the islands which are now known as U.S. Virgin Island were sold from Denmark to the US for $ 25 Million.

23/06/2011

Sweden/Statistics Sweden

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentAs a general comment on how we read this chapter, let us first start by describing our experience in the area. Statistics Sweden has been working with environmental accounts for almost twenty years. During this time, we have performed some pilot studies on assets, but have not made these official statistics nor have we had demand for such extensions. The pilot studies concerned forest accounts, but also work on land use and fish stocks. Valuation of these assets has not been part of our mission, as these issues have been regarded as more experimental. Earlier they were allocated to the National Institute for Economic Research but they stopped this work a few years ago, due to data problems and method problems. The valuation of additional assets would mean a more full valuation for the economic policy makers, although it is not that clear how it would help taking more informed decisions about environmental policy. The method of valuing with net present value and using standard rents makes the information to policy rather limited from an environmental point of view. In Europe, some valuations of fossil fuels are done regularly.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No. We agree with the answer from Norway. More detail is needed about how the purpose of the definition, since it is so wide that it is difficult to see what is not included.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?No. We agree with the comments and suggestions from Norway.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No. We agree with the comments and suggestions from Norway.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No. We agree with the comments and suggestions from Norway.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No. We agree with the comments and suggestions from Norway.

Part III: Any additional comments including those of a more technical natureWe agree with the comments and suggestions from Norway.
In addition:
In 5.4.3 Principles of asset valuation paragraph 91. “Overall these models have proved to be sound tools to the development of meaningful valuations.” This statement is rather bold. To our knowledge, there are still major concerns about how to go from environmental economic valuations for a specific local situation to a national macro estimate.
In 5.7.1 Introduction (on accounting for soil resources) paragraph 290 first sentence: “Accounting for soil resources in purely quantitative terms provides information on the amount of the soil lost due to soil erosion and other causes. “ It seems more likely that the calculation on quantity of soil would be based on information from erosion studies, than the other way around.
5.7.4 Accounting for soil resources in monetary terms, This part seem to be very experimental and is likely to need both research and an inventory of the data available. Soil science is a rather local activity and soil classifications do not easily lend themselves to international harmonisation.

23/06/2011

Lithuania/Statistics Lithuania

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?No opinion.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No opinion. Statistics Lithuania has no experience on this issue.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No opinion. Statistics Lithuania has no experience on this issue.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No opinion.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion.

23/06/2011

Statistics Austria

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing content chapter5-Austria.pdf;

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Table 5.2.1: Central Framework Classification of Environmental Accounts: The table is useful as it provides an overview on the classification of the assets. However, this table would be more readable and understandable if there was a heading for each of the columns. Furthermore it provides the detailed classification for timber, fish and other biological resources but not for mineral/energy, land, soil and water. It is recommended to provide the full set in the second column (e.g. for water resources: surface water, groundwater and soil water).

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Para 34 states that certain types of environmental assets exist which do not have a monetary value. Which do you mean?
We think that the figures on monetary values will be only estimates.
Net present values include estimations of quality. Apart from the fact that quality may change, it is something which is often very difficult to measure and related to a specific environmental asset.
Values may also change. An example is carbon accounting which is mentioned as a topic of interest since short time.

22/06/2011

Mexico/INEGI

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe chapter structure is suitable for the analysis of all the concepts included, however it should include more details on how to estimate the net present value for certain environmental assets.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes, because of it allows incorporating the environmental border as part of the capital necessary for the reproduction of the material life in the long term.
As well, it is important to include the classification of "produced water" and "natural water" in Table 5.2.1 regarding water resources.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes, because of the concept include the temporary and normal regeneration ability of the resource versus its extraction rate, reflected in the balance sheets. In some cases due to the availability of information is only possible to estimate the flows of natural resources from the environment to the economy.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes, although it is important consider some aspects such as variations in prices in any particular year, which may introduce significant restrictions over the net present value of natural assets.
In another hand, it would be very useful if the chapter could include a numerical example of the applying technique of net present value considering all the elements mentioned in the chapter (stocks and flows- including depletions and revaluation-) in order to obtain the best use as a guide and for the purpose of obtain appropriate conclusions about it.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes.
Distinctions between legal and economic owner of mineral and energy resources let us developing in a detail the respective economic accounts.
Moreover, it would be important to identify which portion of such accounts includes the concepts of rental payments or royalties for the extraction of these natural assets in the accounts of both owners, because of in some cases, these concepts are really important for countries that have significant amounts of such resources.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes, since international classifications such as the derivate from the Society of Petroleum Engineers considers the total reserves as the sum of the proven, probable and possible reserves than can be economically exploited at some period of time.

Part III: Any additional comments including those of a more technical natureIt is necessary to highlight the differences between the revaluation of assets as a balancing and calculate it by applying the change in prices, since throughout the chapter is not clear how this variable should be estimated.
As well, in the case of fisheries, as a first approach it should be considered to include only the records of depletion, for cases that do not have an estimate of the opening stock or population size fish.

22/06/2011

Czech Republic/Czech Statistical Office

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentWe think that SEEA 2003 is more detailed in this topic and if this Volume is supposed to be a statistical standard more detailed information is needed.
Sections for individual environmental assets accounts are not balanced, especially the section 5.7 - Accounting for soil resources seems to be underdeveloped.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No, we support the Norway opinion concerning the definition in §14. “Environmental assets must be (1) used in production AND (2) deliver ecosystem services to the benefit of current and future generations”. We would suggest changing this into “Environmental assets (1) must be used in production OR (2) could deliver ecosystem services to the benefit of current and future generations OR both”.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?We think that this Section is of a too general nature, especially in the case of depletion of renewable resources; maybe the more detailed view is a part of Volume 3 of revised SEEA.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No opinion.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No opinion.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion.

Part III: Any additional comments including those of a more technical natureTable 5.3.1. We think that this table should have the most general format including also possible entries for institutional sector accounts. Please complement the table with soil resources.
Table 5.5.4. It would make sense from the environmental point of view to provide a breakdown of petroleum resources by crude oil and natural gas.
Table 5.5.4. We think that one type of physical units should be obligatory for all mineral and energy resources in order to have a common unit for aggregation. We would suggest the mass units (tons), which are used for all resources in material flow accounting.
Chapter 5.5.2, para 182. Technical note: The verb “is” is missing in the first sentence.
Chapter 5.5.5, para 223. “energy resources” in the last line of this para should be replaced by “these other renewable energy resources”. Otherwise the sentence does not make much sense.
Chapter 5.7. Compare to other chapters this chapter is highly underdeveloped and does not provide any table on asset accounts for soil. We would recommend adding these tables and their description.
Chapter 5.7, para 290. This para mentions the loss of soil due erosion. We think that this entry should definitely be a part of an asset account for soil. There is a link to material flow accounting, which also suggest inclusion of erosion in some material flow accounts (as a memorandum item).
Table 5.8.2. In order to allow for material flow accounting we would suggest reporting of entries for timber resources also in mass units (see comment on Table 5.5.4).
Chapter 5.8.3. The chapter does not address at all at which water content the entries for timber resources should be accounted for. This is crucial for mass units, but has also meaning for volume units.
Chapter 5.8.3, para 324. The definition of fellings is not in line with the previous text (para 319). It is said that fellings are left in the forest in para 324, but para 319 says that volume of resources removed from forest also includes trees felled in earlier periods (i.e. fellings).
Chapter 5.8.3, para 326. We support adding felling residues to the physical account assets. This presents a link to material flow accounting, which includes felling residues under unused domestic extraction.
Chapter 5.9.2, para 355. It is said here that the key feature of fish resources distinct from other environmental assets is the capacity for population to regenerate over time. This is not, however, completely true as also forest resources and to some extent water and soil resources can regenerate over time.

22/06/2011

Poland/CSO

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe document is comprehensive and systematic, which is convenient for the user. However, there are some differences reflecting the differences between SNA 2008 and ESA 95/ESA 2010. It should be analysed whether these differences are necessary. If so, they should clearly be disaggregated to allow for easy comparisons between SNA and ESA countries (e.g. some GDP sub-aggregates comparisons) and this fact should be underlined in the preface. It should be possible also to consider other differences for countries other than ESA to keep the balance. Introducing a report on local differences from SNA (e.g. as an annex mentioned in the preface) would enhance greatly the utility of the document for the users worldwide.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes.
Depletion should be clearly indicated as a reduction in stock regardless of its nature (caused by economic activity here, but it can be argued whether catastrophic events and other losses shouldn’t be included).
In the case of timber it is the reduction of its stock caused by overexploitation. The stock of timber is quite high and it can regenerate completely. Because it is high it may be overexploited over long periods of time and damages may remain invisible. These damages to stock (and the environment), however, regenerate very slowly as well.
Whereas, the stock of fish is relatively low but its maximum sustainable yield is high compared to stock. At the same time the maximum yield is a function of existing stock. Therefore, any overexploitation leads to quick depletion of stock and in parallel to quick depletion of the maximum yield – these resources are very fragile. Moreover, once a fish stock is depleted it may not regenerate to its previous levels. A similar observation can be recorded for other animal stocks.
In monetary terms the value of the renewable asset should be based on its maximum sustainable yield for both timber and fish (given here as clear instances) if sustainability is to be the principle. Otherwise, the value of the stock of timber may be included in market valuations driven by possible future profits on overexploitation. This is not the case with animal stocks, where rather their fragility is the problem as mentioned above.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes.
As mentioned in the comments to the previous question, the valuations should be based preferably on the maximum sustainable yield approach and this is also the case for NPV (net present value of future yields). Otherwise renewable stocks may be depleted following their market valuations, sometimes to the damage of the environment.
The problem may be solved by separating institutional ownership of the maximum sustainable yields from ownership of the renewable stocks. Only the first ownership may be considered as tradable assets, although technical solutions may be different in each country.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes.
Although we agree with the above proposal, we believe that the distinction between the proven, probable and possible resources should be maintained in a way that would allow all countries to report in as much as they can. At the same time this will allow to maintain the correspondence with the 2008 SNA.

Part III: Any additional comments including those of a more technical natureAll sprouts in the SEEA that present a methodological difference in respect to the 2008 SNA should be easily identifiable in the text, e.g. by using a different type.

22/06/2011

ESCWA

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentI agree with structure, I have comments on specific topics

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No opinion

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion

Part III: Any additional comments including those of a more technical nature1- The definition of soil resources: Para 25: “The physical inputs of soil are reflected in the volume of soil and its composition in terms of nutrients, groundwater and other matter.”
Ground water should be replaced by water content or soil water. I don’t think we mean here groundwater which deeper than the soil surface.
2- The definition of Fish resources: Table 5.2.1, table 5.3.1 , para 48.i and para 49.i and ii.
Page 6, table 5.2.1 Fish resources are defined as Cultivated and Natural
Page 70, para 354 , Fish are divided into cultured and wild
There should be one terminology ( to be consulted with FAO)
Page 12, table 5.3.1
Natural growth refers to growth of natural and cultivated for both timber and Fish as defined in Table 5.21.
I propose to split Growth in Stock of Timber and Fish into wild or natural and cultivated) and rename Normal reductions in stock “Natural reductions in Stock.
Same for Extractions and Natural Losses
The table would look like the sample below
Table 5.3.2 Should be revised accordinglysee attachment
On Soil Accounts:
Page 59, para 292. Add at the end of para “, and habitat for diverse organisms.”
Page61 Add para at the end on Carbon Accounts for Soils like it is done for the timber account given that soil is a carbon storage medium on short and long term.
On Fish Assets Accounts
Page 73, Para 370:
Natural growth to include both increase in size and number
In the table 5.9.2 , under Additions to stock , Natural growth ( including size and number), or if you keep recruitment as increase in number, to add recruitment under natural growth.
Page 74 Para 373:
Sentence to be rephrased: In the case of cultured fish it is reasonable to assume that the volume and changes in the stock can be estimated…..
Page 77 para 395 and table 5.9.3 Page 78. Replace Cultured by Cultivated (consistency in text)
Page 84 PS REFER to SEEAW and IRWS in this Chapter chapter5-ESCWA.pdf;

20/06/2011

Switzerland/Federal Statistical Office

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe carbon sequestration by soils is missing. The reason why (measurement uncertainties and therefore presentation in Volume 2) should be mentioned in the subchapter 5.7. Indeed, terrestrial ecosystems store about 2,000 Pg of carbon and 1,500 Pg of terrestrial carbon reside in soils (770 Pg in atmosphere, 40,000 in oceans). About half of all soil carbon in managed ecosystems (agricultural) has been lost to the atmosphere due to cultivation during the last centuries. Today this represents an opportunity to store carbon in soils and to enhance in the same time agricultural soil quality.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No, what is in the asset boundary of this chapter 5, which is part of Volume 1, and what is outside, and will therefore be presented in Volume 2, is not clear enough.
Besides that, we consider the focus on ecosystem services not as an alternative but more as complementary to the focus on the individual living and non-living components that deliver these services (§15).
Switzerland supported the definition proposed in the comment form on issue # 10 “Classification of assets”, which is: “An asset is an entity that provides use and non-use benefits to humanity now or in the future”. This definition is quite broader than that proposed in the current chapter (§33), where it is proposed to define the monetary value of an environmental asset as "equal to the economic benefits or series of economic benefits that accrue to the owner of the asset by holding or using the asset over a period of time." This restriction to benefits that accrue to the owner and not to humanity should be explained, as it implies that the public goods character of many environmental assets may not be taken into account in Volume 1. E.g., the omission of public goods leads to the fact, as stated in §37, that the national wealth of a country equals the "summation of the monetary values of all economic assets, including relevant environmental assets." But the national wealth of a country should certainly also include, among other not included items, environmental public goods.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes,
§76 "Depletion is not recorded when there is a reduction in the quantity of an environmental asset due to unexpected events such as losses due to extreme weather or pandemic outbreaks of disease." Please specify here how this kind of reduction of the asset is recorded (-> catastrophic losses, §48).
§144 “Experience in the compilation of NPV has shown that the choice of discount rate generally has the largest effect on the resulting overall value. Put differently, NPV valuations are sensitive to the choice of discount rate. Thus consideration of the choice of discount rate is an important step for compilers.” Please add that this should be made transparent for the users by using sensitivity analysis with different discount rates. In fact, depending on the discount rate chosen, the NPV can be maximised when the resource is used as quickly as possible, which can lead to the destruction of the environmental asset concerned. Please consider the role of future relative prices (see e.g. Sterner/Persson 2008 in Environmental Economics and Policy 61-76).

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes.
§141: Please add at the end of this paragraph that depending on the discount rate chosen, the NPV can be maximised when the resource is used as quickly as possible, which can lead to the destruction of the environmental asset concerned.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes.
Please check if water concessions (e.g. for hydro-power) or land concessions and rents (e.g. wind energy) have to be included here. For example, in Switzerland, water concessions are typically owned by the cantons (states) which lease them to power plants for limited time periods.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes.
Switzerland supports the proposed broad measurement, as it is clearly categorized by table 5.5.1. Nevertheless, it has to be underlined that the measurement of mineral and energy resources and their correct categorization may be affected by lack of access to information or false information, as resource knowledge and uncertainty may be an important factor of speculation on imperfect resource markets and the existence of informal and non observed economy for specific mineral resources.
Furthermore, it would be helpful to give a methodological hint on the recycling flows, as some recycled minerals may play a significant role in the understanding of the development of the demand for “fresh” extraction.

Part III: Any additional comments including those of a more technical natureTable 5.2.1: In the category "Other biological resources", bacteria and fungi should be mentioned along with animal and plant resources: Other cultivated animal, bacteria, plant and fungi resources / Other natural animals, bacteria, plant and fungi resources".
Table 5.2.1: Ecosystems should be mentioned as a memorandum item.
Table 5.3.1 Please complement the table with soil and other biological resources, in line with Fig. 5.2.1
Table 5.6.3: ‘Medium to large fields’ need better definitions; ‘Agricultural associations and mosaics’ is a mixed category, which can hide many important cover features…there is a danger, that such a category becomes a trash basket.
§ 78. Please modify "For biological resources, primarily such as timber resources and fish resources…" This formulation is more open, and reflects the fact that there are other important biological resources.
§243 treats the issue of land cover classes LCSS according to FAO. Please mention, that when implementing these classes, as much compatibility as possible with CORINE land cover and LUCAS should be sought.
§256: Definition of what is forest should be more flexible. In Switzerland (like in TBFRA stats) for instance, we count all trees higher than 3 meters and actually there exist no data about trees higher than 5 meters.
§257: These three types of forest are usually not distinguished by Land cover statistics, but much more by forest statistics (National Forest inventories).
§408: Please replace “production account yields an item called “mixed income” “ by the correct “generation of income account yields an item called “mixed income” “.
§423: Please also specifically mention “river runoff”/”subsurface flows” (currently under “other flows”)
§431: The last three lines which speak of "not only to groundwater, but also to other water bodies: for example, lakes...": Would they not better fit to §430 on surface water?
§438 (i): Please add cooling water, water used for electricity production
§438 ii): In our opinion it does not make sense to differentiate precipitation to lakes from precipitation to surface / soil: We are not aware of any standard monitoring program which would assess this difference, and therefore no data will be available for this differentiation. Similarly, “inflow from other resources into groundwater” will only rarely be assessed / known in a standard monitoring program.
§439 i): Please mention that the recording of abstraction and return flows from hydroelectric power generation must often be based on estimations (e.g. due to data ownership/data access reasons).
§439 i): While the issue of water abstraction for rain-fed agriculture (use of precipitation) is certainly relevant in an accounting sense (see e.g. the concept of Water footprint accounting for agricultural products), it may not be realistic to demand such data. Where and how is precipitation for rain-fed agriculture being measured in a standardized, nation-wide way? Most probably, such data will always be based on estimations or models (see the following sub-paragraph ii). For this reason the SEEA-Water should provide recommendations on how to account for water abstraction pragmatically (e.g. in the form of a qualitative description or model based way).
§441: Please refer here to chapter 5.4.4 on The Net Present Value (NPV) approach.
Physical asset accounts for forest and other wooded land as defined in chapter 5.6.4 can probably not be compiled by land use statistics (impossible or very difficult to distinguish on aerial photos), but only by data of National Forest Inventories (…but they are more relied to TBFRA than to FAO definitions).
To chapter 5.6.5: The monetary asset account for land should less depend on the price of the market, than of the ecological value (prices have to be defined)… if not urban areas are more expensive than sites with a high biodiversity, which should be protected or higher valued by SEEA.

20/06/2011

Islamic Republic of Iran/Statistical Centre of Iran

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing content• Chapter five has suitable structure but NPV needs more examples.
• Due to the fact that in the SNA2008 there is no talk about the energy resources management, the table 5.5.5 is useful for better understanding of the subjest.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No, There are two reasons for covering the proven resources in valuation of resources:
1. Compatibility with SNA2008
2. In valuation of probable resources and possible resources many assumptions should be considered which lead to decrease in the accuracy of calculation.

Part III: Any additional comments including those of a more technical natureNo comment

20/06/2011

Palestine/Central Bureau of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe structure of the chapter, the balance of material and the coverage of the chapter are good.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes

Part III: Any additional comments including those of a more technical nature*. In Table 5.6.1 Land Use Classification, there no mention about Waste land.
*. In section 5.6. there is no mention about land without any vegetarian.
*. In PCBS we agree on the overall changes as theoretical and implementing concepts taking into consideration that the SEEA is not compiled until now so the compilation problems are not compatible.

20/06/2011

Ukraine/State Statistics Service

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes

20/06/2011

Bahamas/Dept. of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe structure of the chapter was well written and arranged including the material discussed.
The overall content was clearly detailed and sections, although technical in nature, was well written and expanded upon. The information given was comprehensive.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.
Please include a more detailed explanation on re-claimed land (See pg 51, Pargphs 250 & 251).
For example, when a portion of ocean is filled in to create an island for commercial use, how is it measured and valuated, as was the case in Dubai with the creation of its Palm Islands?

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. No Comments for this question

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No, future returns should not be taken into consideration because of the speculatory nature of the environmental asset.
For example, will the estimate for royalties on mineral and energy resources be based on today’s price or on future price and value?
To include future value will allow for speculation and would be subjective as the only real value is the current known value.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes, No Comments for this question

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes, Only proven resources should be included (to avoid speculation as stated in the SNA 2008). However, if the final decision is made to include proven, probable, and possible resources, then weighted average should be used to give an aggregate value.

Part III: Any additional comments including those of a more technical naturePlease identify which classification refers to landfills.
Annex A5.3, Land Classifications includes a category identified as Built-up and related land, under this category we refer to the term “waste tips”, please explain in more detail. (See pge 102)
See also the term “man-made wasteland” under category E.- Land Used for Construction and provide a detailed explanation.

10/06/2011

Norway/Statistics Norway

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe level of detail presented in this chapter seems to be less than in SEEA-2003 and the descriptions have a more general nature than before. We suggest that some of the details from SEEA-2003 should be included.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?No, The current definition seems to include nearly everything “on Earth” and it is difficult to understand exactly what is in and out of the SEEA asset boundary. The definition of environmental assets needs a stepwise presentation and discussion. The SEEA-2003 had a more comprehensive discussion which made the concept clearer even though a precise definition was not actually provided (SEEA-2003 §7.24-7.29). What is missing in this revised version is an explanation about what exactly are the differences between the SEEA, the SNA and the experimental accounts. It is important to understand these different boundaries and these should be described more explicitly in the text. (SEEA-2003 has a table 7.1 that clearly places the environmental assets into the SNA’s framework. This type of explanation should be considered for the revision.) Once these boundaries are defined, it should then be stated that the SEEA will focus on the SEEA portion and not on the other pieces of the whole.
Although we do not agree with the current text, the following are comments and corrections to the present text in §14:
The current definition in §14 appears to exclude the importance of clean air and water since there are two requirements that must be fulfilled. Environmental assets must be (1) used in production AND (2) deliver ecosystem services to the benefit of current and future generations. To include the importance of the existence of well functioning ecosystems we would suggest that the “and” be replaced with an “or” so that both requirements not be necessary to be considered an environmental asset. This seems to be more consistent with how this is discussed later in the chapter and in Figure 5.2.1.
The definition in §14 also expects that it is possible to determine what is going to happen in the future and specifically that both production and benefits delivered by ecosystem services can be determined for future generations. These are rather ambitious requirements to have with regards to defining exactly what is defined as an environmental asset. We would suggest changing this to “… production or that could deliver ecosystem…”
The following are specific comments and suggested corrections to other parts of Section 5.2:
In the Central Framework Classification of Environmental Assets (presented in Table 5.2.1) it is not clear where forests are in this scheme. In addition we would suggest the following adjustments:
Fish resources should be re-named “Aquatic resources” and the second level should be changed to “cultivated aquatic resources” and “Natural aquatic resources”; Water resources should be changed to “Water resources (including soil water)”.
In this way it is possible to identify these important aspects and their placement.
The terms “holding or using” are used in §33 and §36’s definition. However in §35 the terms “owned and used” are found. It would appear that §35 has a slightly different meaning than the other two paragraphs (§33 and 36) but this is difficult to determine.
It would have been helpful to have a supporting document provided for this global consultation that would explain why there have been such major changes made to the SEEA Asset Classification in SEEA-2003 Table 7.2 that have resulted in SEEA-rev Table 5.2.1.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?No, We note that a clear definition is not provided in section 5.4 and the closest we can find is in §66 in Section 5.3 (“Depletion relates to the physical using up of natural environmental assets through extraction and in monetary terms represents the decline in future income that can be earned from a resource due to extraction.”). But then in §82 we find the following: “In physical terms, harvest in excess of the maximum sustainable yield represents depletion of the biological resource.” Is this a definition?
Two depletion concepts for biological resources:
In Annex 5.1 we note that depletion for biological resources is defined in §15 as “the difference between extraction and natural growth” whereas in §16 it states “that an estimate of the difference between extraction and sustainable yield can be made and hence an estimate of depletion…” Both definitions appear to be correct but then only the calculation for natural growth is provided in Annex 5.1 and the table in §21. There are no equations showing the treatment using ‘sustainable yield’ as the reference for calculating depletion.
In relation to Annex 5.1 and table in §21:
If (catch – sustainable yield) is the definition of “depletion” then ?X is not able to be simply decomposed into a natural growth component (G) and an extraction component (S). A different set of equations would apply if there is a concept of “sustainable yield” as is relevant and used for fishing stocks. The equations presented are only relevant if depletion is defined as (growth – extraction). In some way, the threshold for the resource (sustainable level) needs to be included in the equations – please note that this can very well lead to negative depletion in the periods when the stocks are below the sustainable level.
The equations in Annex 5.1 were not fully accessible in the available pdf-files. Boxes with “X” were shown for equations 6, 10, 12, 13 and 14 as well as the equation for revaluation due to price changes in the table following §21. It was therefore not possible to evaluate these equations.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?No, The presentation of the valuation of renewable resources, such as timber and fish, needs improvement. Although §127 – 128 discuss estimating the asset life, this is not done in a way that adequately reflects the importance of the extraction profile with respect to renewable resources. To be able to calculate NPV you need an extraction path and a price path assumption. I.e the use of the NPV methodology, when applied to renewable resources, needs to be set in the context of optimal extraction of these resources in order that NPV can be applied appropriately, cfr the derivation of the optimal extraction path for a renewable resource in the economics literature. A common objection to the use of standard maximization of NPV is that it will most likely lead to the destruction of the eco-system from which the resource is taken since the maximum NPV is obtained when the resource is extracted as quickly as possible
We would like to support the use of discount factors that are built upon analyses of returns on produced capital assets instead of choosing financial interest rates. However, in addition a reflection of uncertainty (higher discount rate) and the everlasting resource (lower discount rate) aspects should be included in the evaluation of the relevant discount factor. Analyses of projects with very long durations typically do not use high discount rates, so some mention of ‘social discount rates’ or hyperbolic discount rates where these lower rates are applicable should be included.
In addition to the weaknesses mentioned in the text, additional attention should be given to the assumptions regarding the future when using the NPV methodology. Although the heading over §107 is topical, “The measurement of future returns on environmental assets,” the description needs to also include more focus on future events that may or may not be observable (option values).

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No, It is not reasonable to have a transfer from the government to a private extractor in the form of a “depletion transfer”. The extractor of a non-renewable resource is the one that takes the risk that in the future there will no longer be a resource that can be extracted. We treat the licenses that are given for oil and gas exploration to effectively be a transfer of economic ownership to the owner of the license.
To propose some type of depletion transfer would mean that the extractor would be getting a payment from the owner of the resource (typically government). This is not happening so this proposal is not realistic. It is much more realistic to treat depletion as if the ownership has been transferred to (or leased to) the extractor.
§217 is not clearly written and brings natural resource ownership rights into the discussion in a way that is inappropriate.
If, on the other hand, the goal is to introduce the concept of “depletion adjusted saving” in the context of an overall natural wealth calculation then this use of a depletion transfer is one way of making this possible. It would be a good idea to explain why these types of calculations would be made in order to evaluate when and if they should be considered.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No, We disagree with the recommendation in §193 with regards to establishing a “weighing pattern based on the likelihood of extraction.” The likelihood of extraction is already included in the UNFC categories.
It is our understanding that the UNFC system already includes a type of evaluation of the risk related to future development in the “F” component which relates to the “Field project status and feasibility.” It would seem to be more appropriate to use the most disaggregated UNFC categories available and base valuation calculations on detailed cost estimates related to these more detailed categories.
Since the risk for development is already included in the UNFC system (a type of weighting) it does not seem appropriate to add additional weighting for the likelihood of extraction into the valuation step.

Part III: Any additional comments including those of a more technical natureThe following comments are arranged by section of the text:
Section 5.6 Asset accounts for Land
The land cover and land use classifications have overlapping concepts, but there is no easy solution for separating these so this high level classification is ok.
Table 5.6.3 Mappable Land Cover Classes
“14 – Coastal water bodies” is needed for some types of analyses so this category should be included.
Table 5.6.1 Land use classification
The label “land not in use” does not seem appropriate and implicitly embodies negative messages about the land. Since national parks would be included in this category and some would consider that this land is used for nature protection and preservation, a more neutral label such as “Other land n.e.c.” [not elsewhere classified] would be more suitable.
The category “Land with aquaculture facilities” as currently defined does not include marine aquaculture facilities. If coastal water bodies are included as a land cover class, then some “coastal aquaculture” land use classification would seem to be needed. Many countries have marine based aquaculture so it appears that there is a mis-match regarding the coastal areas with respect to the land use and the land cover classification.
Section 5.7 Soil:
We are positive to the inclusion of soil as an asset class separate from land. This is particularly important when this resource is used in combination with agricultural production. We would like to point out that developing soil accounts would be very challenging even if these accounts only included agricultural soils. Data availability is one of the main challenges however classifications for soil and soil quality are also not universal.
§299: The term “eutrophication” is not used in relation to soil but only when describing water bodies. Suggest deleting this term.
Valuing the stock of timber resources §335-341:
We strongly support the presentation of several alternative methods for valuation of the timber resources as is done in the current draft. The data available for timber resources varies from region to region so providing alternative calculation approaches is absolutely necessary if these types of calculations are to be made with good quality.
Section 5.9 Asset Accounts for fish resources
The list in §362 clearly shows that the “fish” resources include many different types of aquatic species – molluscs, crustaceans, aquatic plants. It would seem more appropriate to call this broad category of resources “aquatic resources” and not the more limited term “fish” – aquatic plants are most certainly NOT fish! And instead use the term “fish” when this is appropriate. The FAO definition in §366 is for “aquaculture” and not for “fish” which would also suggest that the term “fish” not be used for the resource name.
In §367 the terms “enhanced” and “ranched” fish are to be considered “natural biological resources” whereas in the FAO definition it appears that these are elements of aquaculture or “cultivated” biological resources. These terms and definitions are not clear (§367 and §366) and need to be clarified.
The heading above §381 “Virtual population analysis” is too specific for the paragraphs following and we do not feel that this one type of modelling should be highlighted here since there are many different models used depending on the aquatic species. Suggest changing sub-title to “Stock assessment methods” since §382 mentions “other models.”

10/06/2011

Romania/National Institute of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentDefining environmental assets as presented in Section 5.2 creates the opportunity to provide good quality and comparable data on physical environmental accounts.
Classification of environmental assets allows an efficient inventory and accounting changes that occur in the environment of each good, that their growth (natural growth or discoveries) and reduction in the stocks (due to extraction or natural loss).
Important elements in compiling accounts physical environment are described in section 5.4. This definition describes the principles of environmental assets depreciation (depletion or decrease production capacity of environmental services), exacerbating the problems of renewable environmental assets (forest resources, fish resources).
An innovative approach is the assessment of environmental assets, focusing on an appropriate method, i.e. the net present value.
Very important are the methodological principles of construction of each account of environmental goods (land, soil resources, forest resources, fish resources and other biological resources).

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes

10/06/2011

Pakistan/Federal Bureau of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentFederal Bureau of Statistics (FBS), National Accounts Directorate is responsible for evaluation of economic activities of Pakistan in a complete and consistent conceptual framework in line with the 1993 UN System of National Accounts.
National Accounts of Pakistan broadly present the production, income and expenditures activities of the economic sectors such as agriculture, manufacturing, energy, finance, public administration etc.
Pakistan is very much interested in the efforts to monitor environmental impacts caused by economic activities. However, for doing this in a comprehensive accounting framework such as SEEA, Pakistan firstly has to develop a proper system of statistics on utilization of natural resources e.g, depletion of natural resources by production and relevant environmental impacts of economic activities.
Presently, FBS is not experienced enough in SEEA to contribute useful commets for its revision. Entering into activities of SEEA will hopefully be an option for FBS then the revision of SEEA will be the guideline for FBS. Therefore, I would like to be kept in the loop about further development in this regard.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Same “reply” as given above

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Same “reply” as given above

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Same “reply”

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Same “reply”

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Same “reply”

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Same “reply”

Part III: Any additional comments including those of a more technical natureNo comments

07/06/2011

China/National Bureau of Statistics

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentFor Table 5.3.1, I don’t think it need to add some items below “addition” and “reduction” .One reason is that different asset have different items, the other reason is that these information will be shown in following specific asset accounts.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.
The relationship between economic and environmental assets are still not very clear.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? No. Even the physical amount of probable and possible mineral and energy resources are not easy to estimate. The monetary measurement is more difficult.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes

26/05/2011

Republic of Croatia/Central Bureau of Statistics

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?No opinion.

Part III: Any additional comments including those of a more technical natureCBS didn,t develop environmental accounts. For the time beings we collect only data on environmental protection expenditure, material flow, environmental taxes and charges, and the next steps will be work on water accounts and NAMEA AIR.

26/05/2011

International Energy Agency

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentFor energy, the SEEA and the IRES should be aligned. In IRES (and the SIEC) we refer to “oil” and not to “petroleum” (this is, however, a detail that we could live with if you really want to keep “petroleum”). Note – in almost all instances you should be referring to “natural gas” – not “gas”. In the text, gas really means mainly natural gas (CH4) while encompasses a wide variety of gases ranging from natural gas to blast-furnace gas to biogas.
However, in Chapter 5 of SEEA, you refer numerous times to “petroleum resources” as being primarily crude oil and natural gas. This is NOT correct. Although natural gas can be found together with oil, it is definitely not a petroleum resource. You should change “petroleum resources” to be “oil and natural gas resources” or “petroleum and natural gas resources”. In Tables 5.5.2 to 5.5.4 you may want to consider having 2 columns: one for “petroleum resources” and one for “natural gas resources”.
Paragraph iii (the second paragraph) needs to be rewritten not only to change gas to natural gas but also because it is difficult to understand the way it currently stands. By the way there is no mention of venting. And from the way it reads, it seems that natural gas can mainly be found with oil. This is far from being true and this should be reflected in the text.
On another point, as you know, the National Accounts language differs from “energy” language; this is particularly true for the words stocks and reserves. “Stocks” for an energy expert does not mean stocks in the sense that is referred to in this document. It is important that this difference be mentioned, perhaps in paragraph 171.
For information:
For the purposes of energy statistics, stocks are quantities of fuels that can be held and used to
• maintain service under conditions where supply and demand are variable in their timing or amount due to normal market fluctuations, or
• supplement supply in the case of a supply disruption.

25/05/2011

Mauritius, Central statistics Office

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing contentThe structure of the chapter, the balance of material and the coverage of the chapter are good.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes.

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes.

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes.

25/05/2011

Indonesia/BPS-Statistics Indonesia

Part I: Any comments on the structure of the chapter, the balance of material and the coverage of the chapter including any thoughts on missing content1. Structure of the chapter is OK since it is already in a systematic way and inter-explainable among the sections.
2. Balance of material: OK, however it must be recognized that the most problem for developing countries in following guideline like SEEA is the unavailability of the data; and therefore it is recommended that SEEA explains specific method(s) when the data are not available (second best approach to estimate asset accounts).
3. Coverage of the chapter: OK and even the new SEEA (especially chapter 5) is more completed and comprehensive in coverage by including biological resources.

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes. Overall we agree. However, it needs more explanations why it includes crop and plant resources in the classification for environmental assets especially in the case if the crops and plants are seasonal ones, for example: there is 3 month growing plant and then after 3 months it is harvested; the question: what is the method of recording for the plant which is already gone from the earth? This could be a special case for developing countries where plantation could move from one area to another area (moving plantation).

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes. How about if the depletion rate in reality is greater than the national growth rate of renewable resources? It means that the value of the depletion is greater than the value of the assets which is impossible. Our note is that how we correct our estimation on the depletion?

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes. We agree that net present value approach is used because it provides future consideration of asset use; and we tend to suggest that social discount rate is a better choice in this case than the market based discount rate. The consideration is that because social discount rate has more reflection about social costs rather than market discount rate. However, there is a problem in practice when we choose social discount rate, i.e. there is no market indicator for such discount rate which is the opposite for the market based discount rate.

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?No. We do not agree. Our note in this case: 1. The owner of mineral and energy resources is clearly the society of a country. The government of a country is a representative of the society in managing the resources. The government is not the owner. 2. The extractors of the resources are also not the owner of the resources. They only have the utilization property of the resources. Therefore we do not agree with the treatment of joint ownership of mineral and energy resources of government and the extractors. The owner of mineral and energy resources is the society of a country.

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes.

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes. We agree with the SEEA in order to have full coverage of the whole resources. However, it should be very careful when we estimate the probable and possible resources because we do not know exactly how much the physical and the monetary value of the resources (it could be related to the exact volume of the resources and also on its market prices). Consequently, it is perhaps that we underestimate or overestimate the resources which in fact do not reflect the true values of resources.

Part III: Any additional comments including those of a more technical natureNo comment.

19/05/2011

Iraq/ Central Statistical Organization

Part II: 1. Overall, do you agree with the definition of environmental assets and the classification of environmental assets?Yes

Part II: 2. Overall, do you agree with the descriptions and the proposed approaches to the measurement of depletion, particularly with respect to renewable resources?Yes

Part II: 3. Overall, do you agree with the description of the net present value approach in the chapter and the related recommendations?Yes

Part II: 4. Overall, do you agree with the accounting treatment outlined in Section 5.5.5 concerning the ownership of mineral and energy resources?Yes

Part II: 5. Overall, do you agree that in the SEEA, the physical and monetary measurement boundary should be defined to include all known deposits? Yes

Part II: 6. If so, do you agree with the recommendation that valuations for proven, probable and possible resources should be weighted to give an aggregate valuation?Yes